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BCRP: social protests would have impacted GDP in February by two percentage points

BCRP: social protests would have impacted GDP in February by two percentage points

Because the social protests during the second month of the year they occurred to a lesser extent than in the previous months, the economic blow in Peru has also been reduced. According to the Central Reserve Bank of Peru (BCRP), the impact on the Gross Domestic Product (GDP) for February would be around two percentage points, half of what was registered in January.

“Regarding the economic activity of February, the advanced indicators that we have show an improvement in economic activity compared to January. It can also be seen that there have been fewer blocking roads that have been focused on fewer regions than in the month of January . So, taking into account the estimated impact of four percentage points for the month of January, this would be reduced by half, to around two percentage points for the month of February, in terms of the impact of economic activity,” explained Carlos Montoro, BCRP Monetary Policy Manager, during the presentation of the March 2023 Monetary Program.

The official of the monetary entity explained that, in January, the greatest impact had been felt in the non-primary sectors, while, in February, the affectation was observed in the production of the primary sector, which is explained by the closure of some mines due to roadblocks.

As explained by Montoro, the social conflict decreased in February and was concentrated in the Puno region. This social scenario has been reflected in a lower impact on economic activity, although an impact on GDP is still observed. Likewise, he specified that this is a transitory factor whose expectation is that it can be reversed in the following months.

“A normalization of the flow of activities and trade in these regions would be expected,” he pointed out.

Impact in January

The BCRP Monetary Policy manager recalled that, in January, the estimated economic impact was four percentage points, which would imply a 1.4% drop in GDP for the first month of the year.

“There is also an impact on prices associated with the blockades that has been differentiated in the regions. We have carried out a study comparing the evolution of prices in the regions most affected by the blockades against the rest of the regions and we see a marginal increase in these regions, of 1.6 percentage points of inflation,” he added.

Source: Larepublica

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