Peru economy contracts in March, reversing 2 months of growth

The South American country's manufacturing sector, an important source of jobs, was down 9.6% in the month, while its embattled fishing sector meanwhile crashed 32.5%. Peru's restaurant and lodging sector led growth, up 5.6%, while the Andean country's key mining and hydrocarbons sector expanded some 2.6%.

Peru's gross domestic product (GDP) contracted 0.28% in March from a year earlier, the government's INEI statistics agency said on Wednesday, reversing two straight months of growth as the Andean economy hopes to end to last year's recession.

The figure was well below the 0.95% growth forecast predicted by analysts polled by Reuters, though the full quarter is Peru's first in positive territory after four in the red last year. INEI attributed this drop mainly to the manufacturing sector, and to a lesser extent contractions in the financial, construction, fishing and telecommunication sectors.

The contraction lands in stark contrast to the around 3% growth recorded in February, which marked the strongest month in at least two years. The South American country's manufacturing sector, an important source of jobs, was down 9.6% in the month, while its embattled fishing sector meanwhile crashed 32.5%.

Peru's restaurant and lodging sector led growth, up 5.6%, while the Andean country's key mining and hydrocarbons sector expanded some 2.6%. Peru's economy, once a star among its Latin American peers, shrank 0.55% last year due to the adverse effects of the El Nino weather phenomenon, lower private investment mainly in mining and the threats of anti-government protests.

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