June 15, 2020 / 7:59 PM / 22 days ago

UPDATE 1-Peru posts worst-ever drop in GDP as mine output falls sharply

(Updates with additional details from INEI report, quotes from President Vizcarra, background)

By Marco Aquino

LIMA, June 15 (Reuters) - Peru´s economic activity sank 40.49% year-on-year in April, its worst-ever percentage drop in output, as a national lockdown to combat the coronavirus slammed the brakes on industry across the South American nation, the government said on Monday.

Key industries such as mining, fishing, construction and manufacturing all plunged in April, statistics agency INEI said in its monthly economic activity report. Since January, Peru´s economy has shriveled by 13.10%, INEI said.

The drop in output in April was far more severe than anticipated by analysts, who had put the contraction at 33%, a Reuters poll showed.

The world´s No. 2 copper producer was among the first in Latin America to impose draconian lockdown measures to slow the advance of the coronavirus. Many of the country´s sprawling mines drastically scaled back output amid the outbreak, ravaging the economy.

The mining and hydrocarbons sector, which represents 60% of the country´s total exports, fell 42.29% in April versus the previous year. Output of copper, gold, zinc and silver all plummeted, according to the statistics agency report.

The government in May allowed the country´s mines to resume larger-scale operation, and some recovery is expected following the dismal output figures in April.

Peruvian President Martin Vizcarra told reporters later on Monday that the still-raging coronavirus epidemic and dire economic news represented the “most serious crisis in our history.”

Vizcarra said he would push for a massive public works program that would create more than a million jobs. The government has already promised a wide-ranging stimulus package worth nearly 17% of gross domestic product.

Job losses have spiked in Peru as industry has stagnated, according to INEI.

Unemployment between March and May in Peru doubled to 13.1% of the working-age population versus the same period last year, INEI said.

In the capital, Lima, alone, about 2.3 million people lost their jobs, statistics show.

Peru had reported 232,992 coronavirus cases as of Monday and more than 6,500 deaths.

Reporting by Marco Aquino; Editing by Chizu Nomiyama and Peter Cooney

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