Peru Suffering From China Slowdown

Peru continues to suffer from the effects of heightened risk aversion amid the global economic slowdown. China imports a vast quantity of Peruvian commodity exports, non-ferrous metals especially. However, anxieties about growth in the dominant Chinese economy have been raised by its recent under performance. Peruvian balance of payments data revealed a trade deficit of US$502.4mn in September, much larger than that of August and that of a year ago, as a slump in the price of key commodities hit exports. Declines in copper and gold contributed to a significant slide in the currency. Inflation, measured by the CPI, slowed to 3.9% (y-o-y) in September, from 4.04% in August, mainly due to lower prices of fuel and food. In terms of GDP, the economy as a whole (based on measured of industry) slowed to 2.57% (y-o-y) in August, from 3.87% in June and 3.26% in July.

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