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By Teresa Cespedes
LIMA, Jan 16 (Reuters) - Peru’s central bank said on Friday the country’s sharp economic slowdown over the past year had likely bottomed out in November with the weakest monthly growth in more than five years.
The bank’s chief economist, Adrian Armas, said growth in December would mark the start of a rebound and was “certainly” better than November’s 0.31 percent year-on-year expansion, the weakest since June 2009.
“The reading for November was a negative surprise for everyone,” Armas said on a conference call with reporters. “But everything points to that being the floor.”
December growth data is scheduled for release mid-February. Preliminary data shows higher demand for cement and imported goods.
The central bank and government officials had previously described June’s 0.34 percent year-on-year expansion as the lowest point for the global minerals exporter’s economy and said a recovery would take root in the second half of 2014.
But weak mining output, a lull in manufacturing, plummeting fish catches and anemic public and private investment have helped up-end those forecasts.
The economy last year likely grew by less than half the 5.8 percent rate posted in 2013.
Armas said the primary sector last year likely posted its worst contraction since the early 1990s, shrinking 1.2 percent in the first 11 months of 2014 versus the same period a year earlier. Gold mining, coffee farming and fishing all shrank.
The central bank surprised the market by cutting the benchmark interest rate on Thursday after the release of the weak growth data for November, stoking demand for dollars and pushing the sol currency to a fresh five-year low.
Armas said concerns about the sol’s slide have eased somewhat because the bank implemented measures to curb speculation in the local spot market late last month.
The sol, which weakened by 6.4 percent in 2014, kept the central bank from lowering the interest rate in December because of worries that doing so would fuel demand for dollars.
Inflation is also expected to cool thanks to lower oil prices and less-dynamic growth, Armas said. The annual rate will probably ease into the central bank’s 1 to 3 percent target range by February.
“We should be arriving at two percent toward the middle of the year,” Armas said.
Inflation rose 3.22 percent in full-year 2014 and has remained above the target ceiling for the past three months. (Reporting by Teresa Cespedes Writing by Mitra Taj; Editing by Meredith Mazzilli and James Dalgleish)