Peru: Domestic Demand Supporting Growth

The data will likely show that economic activity grew 11% y/y in June from expansion of 8.6% y/y 3MMA in May. This would bring GDP growth to 8% YTD in H1 2009, compared to a 4.3% YTD expansion in H1 2009. It would bring the quarterly reading to 9.9% y/y in Q2 2010, after it fell 1.2% y/y in Q1 2009. Robust domestic (15.9% y/y) and external demand likely continued supporting economic activity. On the supply side, strong growth in retail sector (9% y/y), manufacturing (18.6% y/y), services (8.5% y/y), construction (23.7% y/y), and mining (7.9% y/y) likely pushed economic activity forward.  We expect GDP to expand 6.8% in 2010.

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