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The article explored the economic growth of Peru in 2013. It highlights that a weaker domestic demand and decline in exports heavily contributed towards the slow pace of growth experienced in the country. However, the aforementioned factors did not significantly affect the Gross domestic product. The GDP of the country experienced a marginal rise to 5.02 % during the same year. The figures were officially provided by the government. Slight growth was also realized in December 2013 compared to December 2012.
According to INEI (a government statistics agency), the overall net growth in December 2013 stood at 5.01 percent. In 2013, a growth rate of 5.83 percent was witnessed in the retail sector of the economy, while in 2012, the construction sector expanded by about 8.7 percent. On the other hand, a marginal growth of 2.2 percent was recorded in the agricultural sector in 2012.
However, the mining subsector realized a growth rate of 2.91 percent. According to the statistics released by the government agency, the manufacturing sector performed dismally in 2013. It expanded by an alight margin of 1.7 percent. When Peru’s economy was seasonally adjusted, it revealed a slimmed growth by 0.4 percent in December 2013 compared to the previous month.
The article relates to a number of economic aspects discussed in the course. To begin with, the concept of Gross Domestic Product (GDP) is the main subject matter of the news article. Two main factors that hampered a significant rise in GDP were poor exports and weak demand level at the local level. The article also notes that the slow rise in GDP was mostly experienced in 2013 after a period of about four years.
The global financial turmoil has also been mentioned in the article as one of the likely causes of poor growth in the Gross Domestic Product. Hence, another vital aspect learned in the course material is economic growth. The formal report released by the government after the end of 2013 revealed that Peru’s economic growth had suffered myriads of setbacks ranging from poor demand and supply factors to reduced volume of international trade.
The low prices of metals in 2012 were also cited as one of the factors that slowed the growth rate of Peru in two subsequent years. Initiating a new mining project, as stated by the Peru government, will indeed play a vital role as a GDP deflator (Sobel & Macpherson, 2011).
Apart from the economic terms described above, there are myriads of other concepts that have been identified in this news article. For instance, a trade deficit of 365 million dollars was experienced by Peru in 2013 largely due to the decline in export trade. When the cost of importing goods into a country is higher than the net value derived from exports, it leads to a trade deficit.
Another typical economic term used in the article is the reference interest rate. Peru’s Central Reserve Bank opted to undertake rapid fiscal measures by lowering the “reference interest rate by 25 basis points in November” (Dube 2014, p.1).
Finally, the term ‘growth forecast’ has been used in the article to project the expected rate of Peru’s economic development in 2014. When the central bank carried out a survey through economic analysts, it concluded that the country might realize a 6 percent growth rate in 2014. The 2013 growth forecast for Peru’s economy was projected at about 5.6 %.
References
Dube, R. (2014). Peru’s gross domestic product expanded 5.02% in 2013; growth slowed due to a decline in exports and weaker domestic demand. Wall Street Journal (Online). Web.
Sobel, G. S. & Macpherson, D. (2011). Economics: Private and Public Choice. Mason, OH: Thomson South-Western.
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