The World Bank estimates that the global economy will no longer grow 3% this year, and now it would do so in 1.7% due to high inflation, the drop in investment and the restrictions inherent to the geopolitical conflict between Russia and Ukraine.
With that will get its third lowest rate in almost three decadesbelow the falls seen in 2009 and 2020.
Likewise, it is expected that the most important economies in the world – and Peru’s main partners – such as the United States and China will also see, although at different magnitudes, a contraction in their GDP: 0.5% and 4.3%, respectively.
Will they affect Peru?
It should be noted that in June 2022 they lowered the estimate of Peruvian GDP for this year from 2.9% to 2.6%.
On the other hand, the Central Reserve Bank of Peru (BCRP) expects growth of 2.9%; Meanwhile he Ministry of Economy and Finance (MEF), which oscillates between 3.1% and 3.9%.
According to the World Bank, the Peruvian economy will maintain growth of 2.6% this year thanks to exports and increased copper production; however, as the rest of the international markets weaken, prices will also follow that path.
In addition, the latent social conflict since the arrival of Dina Boluarte to the presidency could reduce the weak private investment, which would have fallen 0.5% in 2022 and by 2023 it would barely rebound 1%, according to the BCR.
“There are concerns about the consequences of social unrest such as mine closures, and it is likely that they could weigh on investment”details the World Bank in its report Global Economic Prospects.
Carlos Oliva, former head of the Ministry of Economy and Finance (MEF), adds that other factors that limit economic growth are inflation above 8% even during the first quarter of this year and the goodbye to the rebound effect in sectors such as tourism, accommodation and restaurants, which in 2022 led the national productive activity.
“The effects of withdrawals from the AFPs or CTS also disappear, which gave 2022 a breather. Beyond the social and political conflicts, these two effects such as inflation and the drop in mining investment will play against you,” he commented for The Republic.
However, the World Bank does expect consumption to expand due to the massive withdrawal of early pensions and the extension of stimulus measures to maintain the quality of life of Peruvians despite inflation.
A few days ago, the Minister of Economy, Alex Contreras, stressed that “they will give everything” to continue to recover business confidence, considering that the BCRP’s macroeconomic expectations show that, in 12 months, they have improved.
Carlos Casas, Economist: 2023, a mediocre plan for Peru
The global economic contraction will decrease the demand for exports. let’s see how it goes China, the main copper market, now with its policies to control Covid-19. With USA and Europe in recession, almost two thirds of our exports are compromised and will reduce the dynamism of our economy.
Internally, everything will depend on the conflict and political environment. We could grow 4% or fall into recession. If roads are closed or mines or production plants are attacked, who would want to invest in a country with high volatility? Most likely we will grow close to 2%, which is pretty mediocre for our potential.
“The goodbye to the rebound effect in sectors such as tourism and accommodation may limit economic growth, together with inflation above 8%”.
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