The peruvian economy it would grow this 2023 by just 1.9%, which would represent a setback (-24%) in relation to previous projections, in which GDP was expected to increase by 2.5%according to BBVA Research.
According to the analysis, the main reasons for this decrease are the social mobilizations carried out at the beginning of the year (-0.3%), political uncertainty (-0.2%) and other factors (-0.2% ).
“These three tenths of lower growth are linked to the social protests that generated stoppages in mining activities, slowdown in production and problems in transportation, service and commerce. An additional two tenths due to political uncertainty and its impact on investment decisions, and another two tenths less due to the permanent impact that social conflicts would have on the tourism sector,” said Hugo Perea, Chief Economist for Peru at BBVA Research.
In that line, for the first three months of the year, a year-on-year “stagnation” is anticipated in the Peruvian economy. In January, a drop of -1.3% was reported, while for February and March, natural phenomena would have also caused a drop in GDP.
“We are anticipating a plateau for the first quarter on a year-over-year basis, there may be a slight contraction. The impact of Cyclone Yaku will not be the same as in 2017, but it will have a negative impact,” added the specialist.
Growth projection for 2024
By 2024, a ‘rebound’ effect of the economy’s growth is expected and it will rise to 3.0%. This would occur in an environment of global acceleration and a drop in international interest rates. However, a downward bias remains due to climatic factors.
“There is a risk factor that a ‘strong’ El Niño Phenomenon may be declared at the end of the year, which will be deployed during the first quarter of 2024. However, it is not yet in our baseline scenario, but rather a ‘weak’ one,” Perea said.
It should be noted that Peru continues to be the main Latin American region with the highest economic growth for this 2023. Above Mexico, which projects 1.4%, Brazil (1%), Colombia (0.7%) , and Argentina and Chile, which would contract.
Inflation and exchange rate
With respect to inflation, BBVA indicates that it is reluctant to fall, but as of March it could present a drop to 8.3% or 8.2% and would close the year between 3.5% and 2.5%. For its part, the exchange rate would present a depreciation and, by the end of 2023, it could be at S/3.90 and S/4.00 due to the interest rate differential between the returns on assets in soles and dollars It would diminish.
Source: Larepublica
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