(Adds government forecast for January growth to third graph)
By Teresa Cespedes
LIMA Feb 15 Peru's economy expanded by a
stronger-than-expected pace of 3.25 percent in December from a
year earlier and by 3.90 percent in all of 2016 as a surge in
copper production offset tepid domestic demand, official data
showed on Wednesday.
A Reuters poll had forecast a 2.8 percent economic expansion
for December and 3.8 percent growth in 2016.
The sol currency surged against the dollar after state
statistics agency Inei released the data, prompting the central
bank to buy $95 million in the local spot market.
The finance ministry forecast an even faster monthly
expansion of 4.5 to 5 percent in January thanks to two
additional working days from the same month in 2016 and a
rebound in public investments and fishing.
Peru had not posted such a robust annual expansion since
2013, when the mining-dependent economy was shifting to slower
growth at the end of a decadelong commodities surge.
New and expanded copper mines commissioned during boom times
have nonetheless spurred the economy's gradual recovery since
2014, while sectors linked to domestic demand have stagnated or
In 2016, manufacturing slipped 1.63 percent, and
construction fell 3.15 percent. Agriculture, retail sales, and
services grew by 2 percent or less, Inei said.
The unemployment rate for the three months ending on Jan. 31
rose to 7.2 percent from 6.6 percent a year earlier, a sign that
the recovery is not producing broad economic gains.
The mining and hydrocarbon sector contributed 1.94 points to
last year's 3.9 percent expansion, more than triple any other
industry, Inei said.
A growing graft scandal that has stalled public work
projects in Peru has threatened to stifle an ongoing recovery
President Pedro Pablo Kuczynski's administration said the
economy might grow just 3.8 percent this year instead of 4.8
percent as previously forecast due to the far-reaching bribery
probe of Brazilian builder Odebrecht.
Peru surpassed China as the world's second-biggest copper
producer last year, when it posted a 38 percent jump in
production to a record 2.35 million tonnes on the back of fresh
output from MMG Ltd's Las Bambas mine and an expansion
of Freeport McMoRan Inc's Cerro Verde deposit.
(Reporting by Teresa Cespedes; Writing by Mitra Taj; Editing by
W Simon, Lisa Von Ahn and Bernard Orr)