Peru Economy Falls Less Than Expected in June After Mines Reopen

(Bloomberg) --

Peru’s economy contracted less severely than expected in June after the government scaled back lockdown restrictions, even as the country became a global hotspot for coronavirus.

Economic activity fell 18.1% from a year earlier, the country’s statistics agency said Saturday. The median estimate of economists surveyed by Bloomberg News was for a drop of 25.9%.

Industries such as mining, fishing and manufacturing ramped up in June as the the government loosened restrictions on their operations to limit further damage to the economy, which contracted by almost 40% in April and more than 30% in May.

Peru is the world’s largest copper miner after Chile, and metals make up more than half of its exports. Service industries and other domestic-dependent sectors are recovering more slowly.

Activity for the three months through June indicate the economy contracted a record 30.2% in the second quarter from a year earlier, among the worst outcomes in the world.

Peru’s central bank expects a 12.5% drop in gross domestic product for 2020, the steepest decline in a century. The unemployment rate in Lima was little changed at 16.4% in July compared with 16.3% in June, the agency said in a separate report. Economists expected the jobless rate to be 14.8%.

Coronavirus infection rates in Peru hit record levels this week, leading the government to reimpose some restrictions and setting back its plans to continue the reopening.

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