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Peru: Trade balance swings to surplus, business confidence moves into optimistic territory

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Staff Writer | Monday January 14, 2019 6:28AM ET
Peru port Lima
LatAm   Peru’s trade balance recorded a USD 586 million surplus in November

Peru’s trade balance recorded a USD 586 million surplus in November, swinging into positive territory from October’s revised USD 74 million deficit (previously reported: USD 155 million deficit) and slightly lower than the USD 646 million surplus recorded in the same month of last year.


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The reading represents the best result in five months.

Exports declined 4.2% year-on-year in November, following October’s 0.7% fall. November’s drop was due to marked declines in exports of gold, copper, zinc and oil-based fuels.

Exports to both China and the U.S. declined markedly, along with sales to South Korea.

This was partially offset by significant expansions in the overseas sales of fishing, farm and textile products. Meanwhile, imports dipped 3.2% annually in November, on shrinking purchases of consumption and capital goods, contrasting October’s 11.5% growth.

In the 12 months leading up to November, the trade surplus was USD 6.8 billion, below October’s USD 6.9 billion and the lowest reading in 9 months.

Panelists participating in the LatinFocus Consensus Forecast see exports growing 5.1% in 2019 and the trade balance recording a surplus of USD 5.0 billion. For 2020, the panel sees overseas sales expanding 4.8% and a trade surplus of USD 4.5 billion.

The business confidence indicator rose to 58.0 in December from November’s 55.5, and thus moved further above the 50-point threshold that separates optimism from pessimism.

A broad-based improvement in sub-indexes drove the increase in business sentiment. Expectations on both the near- and medium-term general economic situation improved.

Moreover, firms had more favorable expectations for the next 3 and 12 months regarding their sector’s economic prospects and for the next 12 months the outlook on demand.

Meanwhile, expectations on the company’s situation for the next 3 and 12 months remained unchanged. On the other hand, hiring prospects for both the next 3 and 12 months declined, as did expectations for the next 3 months on the company’s demand.

Panelists expect fixed investment to contract 3.9% in 2019, which is unchanged from last month’s forecast. For 2020, panel participants see investment growing 3.6%.

 

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