Peruvian Economy: Southern and Eastern regions withstand 0.6% decline with mining and hydrocarbons.

Despite the 0.6% decline faced by the Peruvian economy in 2023, the departments in the Southern and Eastern regions of the country continued to progress thanks to activities related to mining and hydrocarbons, according to a recent analysis by the Economic Studies Department of Scotiabank. During the past year, the southern part of the country stood out as the region with the highest advancement, recording a growth of 3%, driven mainly by the copper production of the Quellaveco mine in Moquegua. The contribution of Quellaveco was crucial, as its production represented 12% of the national total and almost entirely explained the growth of Moquegua, which was the region with the highest advancement nationwide, reaching 27%. According to the analysis, without Quellaveco's production, the growth in the Southern Zone would have been null, and the national Gross Domestic Product (GDP) would have experienced a larger decline. It is estimated that without the contribution of the mine, the national economy would have decreased by 1.3% during the past year. On the other hand, in the Eastern region, a growth of 1.2% was observed, driven by increased oil production in Loreto and the Transport sector, due to the rise in air passenger transport. Despite these advancements, the Eastern region has a limited contribution to the national economy due to its low participation compared to other regions. On the national scene, the economic decline mainly affected Lima and the Northern and Central departments, which recorded declines of 1.4%, 1%, and 0.8% respectively. Lima and the Central zone were affected by lower dynamism in sectors linked to domestic demand, such as Construction and Non-Primary Manufacturing. On the other hand, regions considered part of the Central zone had negative performances, with Ancash being the most affected with a decline of 3.5%, followed by Junín (-3%), Ayacucho (-2.2%), Pasco (-2.2%), Huánuco (6.1%), and Huancavelica (1.7%). Regarding the Northern departments, they were particularly impacted by the presence of the El Niño phenomenon, which affected production in sectors such as Agriculture and Fishing. Lambayeque (-5.7%), Tumbes (-4.1%), La Libertad (-2.4%), and Cajamarca (-0.8%) were some of the regions that ended in negative, with Piura being the only one with a growth of 3.3%. For 2024, the Economic Studies Department of Scotiabank projects that Peru's GDP will grow by 0.6%, highlighting that a greater dynamism is expected in Lima due to the execution of large infrastructure projects. In the Northern region, a growth above the national average is foreseen, while the Southern regions could experience an advancement below the average, offset by the Services and Commerce sectors.