Expectations of employers improve in the short term

Business expectations in the short term recovered in March, compared to the previous month; However, most of them still remain in a pessimistic tranche (less than 50 points), according to the latest report from the Central Reserve Bank of Peru (BCRP). In a month marked by natural disasters as a result of Cyclone Yaku, expectations about the national economy went from 42 to 43 points.

While those corresponding to the sector rose to 47. The company’s investment grew from 46 to 47. Meanwhile, the situation of the company entered the neutral section with 50 points and the demand for products reached optimistic territory for the first time with 52 to three months. The recruitment of personnel continued at 45 points.

long term scenario

For their part, 12-month expectations continued in the optimistic range, but there were some falls in March. In addition, they were lower than the figures observed in December 2022. In what corresponds to the economy and the sector, they did not vary and continue at 52 and 55 points, respectively.
Meanwhile, expectations about the situation of the company decreased one unit to 58 points. Demand for products rose from 60 to 61. Hiring and investment in his company dropped two points to 52 and 53.

current picture

In what corresponds to the current situation, all the indicators continue in pessimistic territory. Thus, the business continues at 48 points, while sales grew from 42 to 47. Along the same lines, production and purchase orders in relation to the previous month rose three points to 43 and 44, each.

Uncertainty

The pessimism of businessmen in the short term is influenced by external factors such as the confrontation between China and the United States, as well as forecasts of a slowdown in the world economy, and internal factors, such as political instability, argues economist Armando Mendoza.
Added to this, according to the researcher, is the existing uncertainty about the State’s capacity to generate reactivation policies that stimulate the market and that are sustainable over time.

Data

About the range. Inflation expectations were between 4.3% and 5.7% by the end of 2023. Dollar. Estimates on the exchange rate place the greenback between S/3.82 and S/3.85 at the end of this year.

We need there to be a clear north

Approach. Edgar Vásquez, director of CIEN-ADEX

In Peru we have been in a complex circumstance for several months now, basically due to internal conditions, because even, at an international level, the expectations of the main organizations are improving for this year. The problem here is that from the private sector we see that political instability continues and there is no clarity regarding the social conditions of the coming months.

There is a possibility that the protests could continue and affect economic activity. What has to be done is to give strong signals that there is a clear north. That hasn’t been seen either. There are good attempts like the MEF’s Con Punche Peru programs, but they have to go hand in hand with short-term results.