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South Peruvian economy flies low according to IPE report

With contribution from the IPE

Despite the fact that some indicators indicate that the national economic activity is normalizing, the economy of the south of the country, in the first half of 2021, contracted by 3.3%. This report corresponds to an analysis carried out by the Peruvian Institute of Economics (Ipe) in the regions of Arequipa, Apurímac, Ayacucho, Cusco, Puno, Moquegua and Tacna.

Moquegua was the region that registered the highest growth between the first half of 2021 and the same period of 2019 (17.6%), due to the advance of primary manufacturing (+ 26%). According to the National Institute of Statistics and Informatics (INEI), manufacturing activity represents 45.4% of Moqueguana production. Tacna appears as the second region with the highest growth (3.7%). However, the region’s growth was affected by the slow extraction of minerals during the second quarter of this year. Thus, mining – an activity that explains 50.9% of Tacna’s activity – fell 15.2% compared to the same period in 2020, the Ipe report states.

Steps back

Among the regions that contracted, Cusco marked the biggest drop (-8.7%). This would be related to the situation of the tourism sector. Between January and April 2021, arrivals to lodging establishments are 34.9% lower compared to the same period of the previous year, according to the Ministry of Foreign Trade. As a consequence, the number of formal workers in the service sector is still 11.3% lower compared to 2020.

Arequipa fell 7.0% mainly due to the fact that the mining sector has not yet recovered. Compared with the first half of 2019, in the first half of 2021 the production of copper, gold and silver is 24.1%, 8.3% and 38.4% lower, respectively. For its part, Ayacucho also fell between the first semester of 2021 and the same period of 2019 (-5.0%), influenced by the performance of the agricultural sector (-23.6%). Along the same lines, Apurímac (-3.7%) and Puno (-1.2%) follow the trend of the southern zone.


The mining activity It is a key activity in the southern regions, since it represents almost 40% of the Gross Domestic Product of the regions that compose it.

Therefore, the return to the growth path will depend fundamentally on the evolution of this sector and the advance of vaccination. Regarding the first, the continuity of the mining investment projects, the international price of minerals and the internal conditions that each region promotes will be key for the revitalization of this activity.


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