BBVA Research maintains Peru’s growth forecast for 2022 at 2.3% and cuts it to 2.5% for 2023

The BBVA Research maintains at 2.3% the Peru growth forecast by 2022. The slowdown is driven by the high level of uncertainty in global economic agents due to increases in interest rates by central banks and an imminent recession in the main world economies.

“It cannot be ruled out that this year’s growth will be somewhat higher, possibly 2.4% or 2.5%, but we have preferred to maintain our forecast due to the highly uncertain environment that we are experiencing at the moment,” he mentioned. Hugo PereaChief Economist for Peru of the BBVA Researchduring the presentation of the report Peru Situation for the fourth quarter of this year.

In this sense, he affirmed that the international environment has deteriorated and, at the local level, the “rebound effect” is running out. In addition, he assures that financing conditions are less favorable, business confidence is weak and social conflicts continue to escalate.

Growth projection for 2023

For 2023, BBVA Research revised its growth forecast downward to 2.5% from 2.8% in its previous estimate.

“For next year we should see a better performance of extractive activities, especially mining and hydrocarbons and even fishing,” Perea explained.

He also indicated that next year there will be an acceleration in exports, due to increased mining production, and a dip in public investment, “we expect a relatively significant contraction in 2023.”

Impact of the start-up of Quellaveco

The start of commercial operation of the Quellaveco mine this year, and with a production of 100,000 tons of copper, would have an impact of 0.3% on the growth of the national GDP in 2022.

“If next year (Quellaveco) goes on to produce between 250,000 and 300,000 metric tons, the direct impact on growth would be between 0.4% and 0.5%”, highlights the economist from BBVA Research.

Exchange rate would close 2022 on S / 3.90

The dollar exchange rate would close this year between S/ 3.90 and S/ 4, because the Central Reserve Bank of Peru would be close to closing its upward cycle, while the Fed would continue to raise “more aggressively” Interest rates.

“In the medium term we should see an exchange rate moving below S/ 4 in a recovery environment, linked to the recovery of the prices of the commodities that we export,” says Perea.

Meanwhile, in 2023 the US currency would move between S/ 4 and S/ 4.10. While between 2024 and 2027 the average exchange rate would range between S/ 3.95 and S/ 4.05 per dollar.