Economics

GDP expands 5.6% YoY in March

Gross Domestic Product | Peru

National Production
15 May 2012 Hedmond Rios hrv@celfin.com +562 713 4807 Mario Arend mas@celfin.com +562 713 4903 Juan Camilo Dauder jds@celfin.com +574 326 1376 Cesar Perez-Novoa cp@celfin.com +562 490 5012

Manufacturing sector surprises on the downside

Today (May 15) Perus National Statistics and Information Institute (INEI) reported the National Production indicator (a GDP proxy) up 5.6% YoY in March 2012, below our and market expectations. Manufacturing sector contraction of 3.2% YoY was a surprise since signs of recovery were depicting during the last three months. The main reason for this drop was the contraction in sales abroad (mainly to Ecuador, Venezuela, and Chile). Likewise, there was a revision on the downside in the demand for cement, but it is still growing strong at 14.7% YoY. We observe that services activities continue growing at solid rates with hotels and restaurants (+10.0% YoY), financial services (+10.0% YoY), transport and communications (+9.3% YoY), services to others companies (+7.9% YoY), and retail (+7.2% YoY). Despite the drop in workin-process construction - by far keeps - pushing the economy; it was up 14.7% YoY mainly on increases in the demand for concrete (+15.5% YoY) - civil works are in mining, shopping malls, industrial facilities, water and sewerage, and roads and highways. Mining and hydrocarbons expanded by 6.0% YoY in March and it seems that the path of recovery is resuming. Metallic mining activity was up 4.1% YoY and hydrocarbon up 15.3% YoY. On its part, Fishing is being hit by environmental changes and fell again in March. The sector was down 15.1% YoY Peru: National Production Index (GDP proxy) (%, YoY)
12

0 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12

Sources: INEI, Celfin Capital.

Favorable outlook for 2012

Recently (May 3), we updated our economic growth forecast for 2012 to 6.1% from previous 5.9%, since we observe investment up 7.4% and government spending growing at 6.7% in 2012. Undoubtedly, construction sector will play a key role and other sectors will be benefited by this momentum.

GDP | Economics

Economics | Gross Domestic Product

15 May 2012

Manufacturing (YoY, %)
24

Transport and Communications (YoY, %)

15

16

10
8

5
0

(8) Mar-10

Nov-10

Jul-11

Mar-12

Mar-10

Nov-10

Jul-11

Mar-12

Sources: INEI, Celfin Capital.

Sources: INEI, Celfin Capital.

Construction (YoY, %)
25 20
15 10 5

Retail (YoY, %)
12

0 (5) Mar-10
0

Nov-10

Jul-11

Mar-12

Mar-10

Nov-10

Jul-11

Mar-12

Sources: INEI, Celfin Capital.

Sources: INEI, Celfin Capital.

GDP | Economics

Research Team & Disclaimer

Celfin Capital Equity Research

Chile Cesar Perez-Novoa Managing Director: Strategy & Economics +562 490 5012 cp@celfin.com Tomas Gonzalez Senior Analyst: Electric & Water Utilities, TMT +562 490 5034 tgb@celfin.com Alex Sadzawka Small Caps Analyst: Industrials +562 490 5448 asl@celfin.com Jeanne Marie Benoit Small Caps Analyst: Consumer +562 490 5304 jbg@celfin.com Peru Isabel Darrigrandi Senior Analyst: Metals & Mining +562 490 5093 ida@celfin.com Hedmond Rios Economist +562 713 4807 hrv@celfin.com Mario Arend Chief Economist +562 713 4903 mas@celfin.com Colombia Natalia Agudelo Analyst: Energy & Utilities +574 326 1376 nap@celfin.com Jairo Agudelo Analyst: Industrials & Consumer +574 326 1376 jar@celfin.com Ruben Arismendy Analyst: Metals & Mining Exploration +574 326 1376 ra@celfin.com Juan Camilo Dauder Economist / Banks Analyst +574 326 1376 jds@celfin.com Andres Cardona Analyst: Industrials +574 326 1376 acg@celfin.com

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GDP | Economics