Peruvian economy in suspense: March drop worries key sectors.

In recent months, the Peruvian economy has experienced a fluctuation of results that have kept analysts and citizens alike on edge. After an increase in January and February, the month of March brought a contraction of 0.28%, reversing the positive trend observed in the first two months of the year. This negative variation has generated concern in various sectors, especially those that have been hit hardest by this situation. In this context, three sectors have been identified as the main drivers of this economic downturn. Fishing, manufacturing, and construction have shown significant setbacks, with fishing being the most affected sector with a decrease of 32.48%. The lack of authorization for the capture of anchovy in the north-central part of the country has directly impacted manufacturing, with a 13.88% reduction in the production of fishmeal and fish oil. Additionally, construction has also experienced a contraction, as expected by the Peruvian Chamber of Construction (Capeco). Guido Valdivia, executive director of Capeco, pointed out that factors such as the decrease in cement consumption and execution problems in the State have contributed to this situation. Despite the recovery of public works, confidence has not been restored as quickly as expected, continuing to generate uncertainty in the sector. While Holy Week has been cited as one of the causes of the economic contraction in March, analysts warn that it is not the only determining factor. Alfredo Thorne, head of Thorne & Associates, highlighted that even when the data is seasonally adjusted, the economy showed a slowdown in that month. Although a weak result was expected for March, the final outcome has surprised on the downside, leading to a revision of the GDP growth projections for the current year. Despite closing the first quarter in positive territory after four consecutive quarters of decline, the figures are not as encouraging as they may seem at first glance. Carlos Parodi, an Economics professor at the University of the Pacific, emphasized that while there has been an increase in the economy in the first part of the year, it is relatively small considering the overall picture. The need for sustained growth above 4% annually to combat poverty remains a pending challenge for the country. Regarding future projections, the Banco de Crédito del Perú (BCP) estimates that the economy would have improved in April and May after the slowdown observed in March. They maintain the projection of a GDP rebound of around 3% for the year 2024. On the other hand, Alfredo Thorne expects that the release of CTS and AFP funds will have a partial impact in the second quarter, but anticipates that it will dissipate in the following quarters. Despite these encouraging forecasts, economic uncertainty persists in a context of challenges and obstacles that must be faced to achieve true recovery and sustained growth.