June 3, 2014 / 6:15 PM / 4 years ago

Peru's central bank 'not optimistic' about April economic growth

LIMA, June 3 (Reuters) - The president of Peru’s central bank said on Tuesday he is not optimistic about economic expansion in April, as weaker-than-expected mining activity continues to drag on overall growth.

April’s growth rate is scheduled to be released June 16, but preliminary government data shows the mining and energy sector shrunk 6.1 percent from the same month in 2013.

“We’re not very optimistic about April,” Central Bank President Julio Velarde told reporters on the sidelines of an event. “Construction isn’t very good, mining has extremely low growth, there are several sectors that are going to slow down.”

Velarde said economic activity was also limited by a two-day holiday that fell on April instead of March this year.

Peru’s economy expanded 4.8 percent in the first quarter compared to the same period in 2013 - the second slowest quarterly expansion since the financial crisis in 2009.

Finance Minister Luis Miguel Castilla said economic growth has been weaker than expected in part because of aging mines and technical problems that are delaying the ramp-up of Chinalco Mining Corp’s massive copper project Toromocho.

The Chinese-owned company finished construction of the mine last year after a $4.8 billion investment. It is expected to eventually produce 300,000 tonnes of copper per year.

“There has been less production in the mining sector,” Castilla told reporters on Tuesday. “Toromocho is going to increase its production of copper but for technical reasons this has been delayed to the third quarter of the year.”

Chinalco declined to comment, a spokesman in Lima said. The company’s website says full production is expected in the third quarter.

Earlier this year operations at Toromocho were temporarily halted after the environmental regulator ordered it to stop dumping waste into nearby lakes.

Peru is a top global producer of copper, silver and gold. Mining makes up 15 percent of gross domestic product and 60 percent of the Andean country’s export earnings.

The central bank expects the economy to grow 5.5 percent in all of 2014. (Reporting By Teresa Cespedes and Mitra Taj; editing by Andrew Hay)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below