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Sociopolitical crisis deteriorated private investment in 2022

Sociopolitical crisis deteriorated private investment in 2022

Impact. Although a 0% variation was expected, the fall became more acute in the fourth quarter and closed the year at -0.5%, according to the BCRP. The Government hopes to reverse this negative result and estimates a growth of at least 3% in this indicator.

At the beginning of 2022, private investment, after rising 37.4% in the bicentennial, was expected to close at 0%, which did not imply any setback, but rather gave stability to the sector, according to the Central Reserve Bank of Peru. (BCRP).

However, last year private investment reached S/115,772 million, a 0.5% drop compared to 2021, mainly explained by the sociopolitical crisis that arose as a result of the failed coup d’état by Pedro Castillo, the arrival of Dina Boluarte to the Government and the protests for the advancement of elections.

In data from BCRPthe sharpest decrease in private investment was seen in the fourth quarter (-2.5%), after varying in the three previous periods by 0.7%, 0.8% and -0.8%.

The result of the last part of the year is mainly due to the real contraction of mining investment (-12.3%) and to a lesser extent due to the decline in investment in other sectors (-0.9%).

While the annual drop, according to the BCRP, is also explained by mining investment (-5.5%), despite the slight rise in non-mining (0.1%); all this in a period in which business expectations were almost always in the pessimistic range.

MEF: rise to 3% in 2023

In this regard, the head of the Ministry of Economy and Finance (MEF), Alex Contreras, pointed out that by 2023 a minimum growth of 3% in private investment is expected, for this it is key that in the short term “new engines are generated of growth and invite investors to come again”.

“Last year, growth was zero, it even decreased. This year, the goal is for private investment to grow at least 3% in real terms,” ​​he told local media.

How to reverse it? The official pointed out that the delegation of tax powers requested from Congress – which was partially granted without considering the changes to the tax regimes – incorporates improving the deadlines for obtaining licenses and reducing the time to complete business operations, as well as an improvement in public-private partnerships, with a new land and transfer law.

mining investment portfolio

Minister Contreras announced a few days ago that Peru has a feasible mining investment portfolio of about US$8,000 million for 2023 and 2024.

Also, the Government It plans to award 15 PPP projects this year for close to US$2.5 billion and declare 16 projects of interest for US$5.4 billion.

This way, 31 PPP projects would be accelerated for a total amount of US$7.9 billion, detailed the MEF.

Source: Larepublica

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