August 28, 2015 / 8:35 PM / 4 years ago

Peru says economic growth will suffer if El Niño intensifies

LIMA, Aug 28 (Reuters) - Economic growth in Peru will suffer if the El Niño weather pattern shapes up to be the “extraordinary” event that many fear it could be later this year, the production minister said Friday.

Peru plans to start its main fishing season a month earlier to lock in anchovy catches in case El Niño intensifies, Piero Ghezzi added.

An updated official El Niño forecast, scheduled for release on Monday, is expected to paint a clearer picture of potential impacts late this year. The last forecast for a “strong” El Niño said the phenomena might become “extraordinary” in the summer, which starts in December in the southern hemisphere.

In Peru, El Niño has in previous years brought torrential rain that triggered floods and landslides, ruined roads and caused ocean warming that wreaked havoc on fishing.

“If El Nino, God forbid, were extraordinary, clearly Peru’s GDP is going to be affected,” Ghezzi told reporters.

The last major El Niño event, in 1997/1998, likely knocked 4.5 percentage points off Peru’s economic growth rate, Ghezzi said. In 1982/1983, it probably kept GDP from expanding by 7 percentage points.

Peru’s mining-fueled economy has been struggling to recover from last year’s sharp slowdown last year, when GDP rose just 2.35 percent - down from rates that topped 5 percent in the previous decade.

Ghezzi said his ministry could ease rules on commercial fishing because of El Niño and will likely move the start of the anchovy season to October from November.

“We want to put in place adaptive policies for industrial fishing in order to reduce the impacts of El Nino,” Ghezzi said.

Peru is the world’s top supplier of fishmeal, animal feed made of ground-up anchovy. The cold-water fish disperse when sea temperatures rise.

Earlier this week rising worries over El Niño led Peru to withdraw as a host of the Dakar Rally, an annual off-road race held in South America.

Weather bureaus in Peru, the United States, Japan and Australia have been increasing their forecasts for the strength and duration of El Niño.

The warming of sea-surface temperatures in the Pacific can lead to scorching weather in Asia and heavy rains in South America.

Reporting By Mitra Taj; Editing by Andrew Hay

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