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Tuesday, November 29, 2022

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Julio Velarde defends the current economic model

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The last presidential elections have had the change of the economic model as a battle horse for the candidates who want to channel the discontent of a sector of the population, which criticizes the model despite the macroeconomic growth figures of the last decades. This issue was addressed on the second day of conferences of Perumin 2022 which takes place in Arequipa.

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“It is not clear why the model that supports these growth figures does not have the support of the population,” former Minister of Economy Waldo Mendoza raised yesterday to the president of the Central Reserve Bank of Peru (BCRP), Julio Velarde. For the manager, people do not perceive an improvement in basic public services such as health and education.

“We have failed a lot in providing basic services. It is intolerable that, in a democracy, (only) those who have money can save their mothers or their children (…). They are the important aspects for society. People want better education and better health,” Velarde replied.

According to the president of the BCRP, even with the current income that the country has, it would have been possible to implement a health system similar to the one that Spain had a few decades ago. For his part, Mendoza concluded that as long as economic growth is not appreciated by the majority of the population, “political experiences like the one we recently experienced” will be repeated, referring to the last electoral process.

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Julio Velarde was present at Perumin, an event that takes place in Arequipa. Photo: The Republic/Rodrigo Talavera

Inflation and prospects

Julio Velarde hopes that this year inflation in Peru ends with figures of 7 or 8% and the perspective is that by 2023 it will drop to 3%. However, it will also depend on external variables that may arise along the way. “If you asked me at the beginning of the year when we will have inflation at 3%, I would say this year. But the invasion of Ukraine came and it meant high pressure,” Velarde said.

Regarding the interest rate applied by the BCRP as a measure to contain inflation, Velarde said that it is at 6.75% and they hope not to raise it any more, but it will again depend on the context.

In addition, he referred to GDP growth figures, which he projects for this year and the next at 3%. The president of the BCRP tried to see the positive side despite some projections of zero growth. For example, he reaffirmed that by 2023 public investment will grow by 0%, in part because there will be new regional and municipal authorities. However, he referred that this last semester an x ​​of public works is expected.

The key

at zero. In the case of private investment, for this year the growth will be 0%. However, Velarde maintained that compared to 2019, it grew by 15%. “It is as if it had grown 5% per year”, express.

Source: Larepublica

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