Andean Group - August 2009 (ISSN 1741-4466)

The country's GDP grew by 0.34% in the first half of 2009, even though output in June itself was 2.08% down on June 2008's. Annualised, GDP growth is running at 4.35%, according to the official Instituto Nacional de Estadí­stica e Informática (INEI).

The slowdown in the economy is largely due, Inei claims, to weaker demand for Peruvian exports. In June the worst hit economic sectors were fishing (down 18% year on year); manufacturing (down 12%); agriculture (down 5%); and mining and hydrocarbons (down 2.3%). Other sectors such as utilities, construction and retailing were down by between 1.3% and 3.4%.

The really buoyant sector of the economy is financial services which was up by 11.4%. Government services are also on the up: in June their output was 15% up on June 2008.

The main reason for the boom in financial services is a surge (30% increase) in demand for mortgages. Business lending was up by 19% but consumer lending rose by only 4%.

Exports: In the first six months of 2009 export revenues fell by 31% to US$11.1bn.

Interest rates: The central bank cut interest rates to 1.25% at its meeting on 6 August. This was the seventh consecutive monthly cut and means that the bank has trimmed rates by 5.35 percentage points since the start of the year.