Peru’s central bank confirmed a 0.5% YoY drop in GDP for Q2 2023, as anticipated by Scotiabank. A notable 3.0% drop in domestic demand exceeded expectations, attributed to volatile inventory changes. Despite headwinds like social conflicts and severe weather events like Cyclone Yaku affecting Q1, seasonally adjusted GDP actually grew 1.3% in Q2 compared to Q1. Scotiabank expects a gradual economic recovery to begin in Q3, anticipating around 1.0% YoY GDP growth, assisted by declining inflation rates and a potential recovery in private consumption and investment.