New throughout

By Jude Webber
LIMA, Peru, Nov 12 (Reuters) – Peru’s National Statistics Institute published sector-by-sector production figures for September on Tuesday that analysts said proved Latin  America’s No. 7 economy was growing faster than expected — for now. The government agency, INEI, said in a report production in the manufacturing sector — vital for much-needed jobs growth – rose 7.43 percent in September compared with the same 2001 month, while output in the nation’s traditional mainstays of fisheries and mining grew 18.31 and 2.8 percent respectively. Agriculture output rose 3.69 percent, it said. The agency gave no comparisons for the data. INEI said last month that the gross domestic product data it had been releasing monthly for the past 15 years were faulty, and said the new-look sector-by-sector figures would be the only indication of monthly economic performance until it had corrected its methodology and rebased its index next year. One of the main problems with the old data was how the services sector was calculated, and INEI had planned to strip that out and issue an aggregate figure for the primary and secondary sectors — chiefly mining, fishing and industry – that make up around half the economy.
But in a U-turn on Tuesday, INEI said it had changed its mind on issuing monthly GDP data because it had been impossible to work out an accurate new aggregate methodology in time, and would still issue an old-style September GDP figure next week. One economist at a large bank in Lima, who declined to be named, said the sector-by-sector numbers signaled another month of strong growth for Peru, which the government boasts is a beacon amid the battered economies of Latin America. “This (sector-by-sector data) would have given a September GDP growth number of around 6 percent,” the economist said. Asked if he agreed, INEI’s new chief Farid Matuk told Reuters the 6 percent growth estimate was “totally sensible –(perhaps) half a point up, half a point down.” The Economy Ministry last week forecast September GDP growth of 6.7 percent and 5.3 percent in October. The economist said his own forecast for September was for 5 percent growth.

CAN PERU KEEP IT UP?
Guillermo Arbe, chief analyst at the private Apoyo consultancy, said the figures were upbeat. “We have indicators that show the economy, above all that linked to internal demand, non-primary sectors, is growing …more than we expected … It’s encouraging,” he said. Peru is targeting 2002 growth of 3.7 percent after 0.2 percent last year. But the government admits the economy needs to grow faster yet to translate growth into jobs — Peruvians’ No. 1 concern and one of the reasons why President Alejandro Toledo’s popularity is down to around 20 percent in polls. But asked whether the big growth rates would continue at this clip, the bank economist said: “I think it’s over. We’ll still show growth but it won’t be as high in the last quarter. “A lot of the growth up until now has been because of a statistical bounce. September 2001 was one of the worst months there was,” he said. In September last year, the economy grew 2.7 percent. The economist said the positive effects of tax measures during the year, and of the giant Antamina copper and gold mine which began operations last year and gave the economy a push, were winding up. “I think we should end the year with growth of 3.5 to 4 percent. But next year’s a bit more complicated,” the analyst said. “There will have to be a lot of fiscal belt tightening.”

NEW-LOOK FIGURES NEXT YEAR
Matuk told Reuters the September GDP data would consist of a single figure without a sector-by-sector breakdown, and would be based on the same faulty methodology used for the past 15 years because there was no time to work out a new method. From 2003, INEI will issue a new-style aggregate figure –not the old GDP based on the faulty sums — while it works on improving the math and rebasing the index in order to provide more accurate, quarterly GDP numbers from mid-2003. Another senior INEI official said the agency would release the sector-wide data weekly from now on. INEI gave the following data:

Sectors Sept 2002 Jan-Sept 2002
Agriculture and farming 3.69 5.26
Fisheries 18.31 -2.04
Mining 2.80 14.97
Manufacturing industry 7.43 3.09
– primary industry -1.90 -2.50
– non-primary industry 9.75 4.65
Electricity and water 5.06 5.45
Financial services 9.65 15.57

(Additional reporting by Missy Ryan)
((Lima newsroom, tel +511 221 2130, fax +511 221 2133, e-mail: lima.newsroom@reuters.com))

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