Julio Velarde: the Peruvian economy would grow 13.2% this year

The Peruvian economy would grow 13.2% this year if the production rhythm observed until August is maintained, according to the president of the Central Reserve Bank (BCRP), Julio Velarde.

Said calculation by Velarde would be 1.3 percentage points higher than 11.9% estimated by the issuing entity in its latest inflation report.

“It’s not just rebound”

The president of the entity said that the fiscal and monetary policies applied since last year have encouraged the “very strong” recovery of the economy.

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“Such a strong monetary and fiscal stimulus package was applied that we are enjoying it now. It is not just a rebound, it is a consequence of the political actions that were taken, “he explained in a forum organized by the School of Public Management of the Universidad del Pacífico.

For his part, the economist Luis Arias Minaya He argued that the recovery of the GDP is already an issue settled.

“It is not just ‘rebound’ (getting out of the well into which we fell in the pandemic). There are already clear signs of reactivation, “he said via Twitter.

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Better panorama

Velarde said that Peru is better than any of the six largest countries in Europe, in terms of recovery in times of pandemic.

Along these lines, Velarde emphasized that only Chile surpasses the national market in growth indicators – already 8% above pre-ndemic levels, while Peru barely passes it by 2% – but we are doing better than the economies of Brazil, Argentina, Colombia and Mexico.

“Those who speak of recession, abstain,” Arias Minaya noted for La República days ago after studying the economic indicators for August, which for the first time exceed those seen before the health emergency.

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In addition, It is necessary to indicate that for the second consecutive month the macroeconomic expectations of the BCRP remain on the rise (see infographic).

The survey reveals that expectations about the 12-month economy went from 45 to 51 points, abandoning the pessimistic section to settle in the optimistic one; Although the expectations regarding the hiring of three-month personnel improved, they are still in a pessimistic stretch with 47 points.

However, the perception of the 12-month hiring of staff remains optimistic.

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Agreement

According to the Vice Minister of Economy, Alex Contreras, Currently 99% of economic activities are operating, and there are “few” sectors that are inactive facing the end of the second year of the pandemic.

The official pointed out that in the last four months Peru reached levels prior to the COVID-19 pandemic, by achieving one of the fastest recoveries in the region.

“We expected to recover pre-pandemic levels in 2022; However, given the dynamics of GDP, it is very likely that the 10.5% figure projected for this year will fall short. We would be talking about a growth of 12.5% ​​with which we would recover pre-pandemic levels ”, he stated.

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Finally, it should be remembered that entities such as world Bank and the International Monetary Fund They are also close to local projections: 11.3% and 10%, respectively.

Central Bank raised the benchmark interest rate to 2%

The directory of the central bank agreed to raise the benchmark interest rate from 1.50% to 2%; considering that the 12-month inflation rate went from 5.23% in September to 5.83% in October, temporarily passing the target range due to the rise in international prices of food supplies and fuels, as well as the exchange rate.

The BCRP projects that inflation will return to the target range in the second half of 2022 thanks to the reversal of the aforementioned causes and that economic activity will still be below the potential level.

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Nevertheless, Julio Velarde foresees 3 or 4 years of internal uncertainty in the face of the world situation.

The word

Julio Velarde, BCRP president

“Such a strong monetary and fiscal stimulus package was applied that we are enjoying it now. It’s not just bounce, it is a consequence of political actions ”.