More blows to the home economy. Peruvians will have to spend more to consume two important products of the basic basket, such as lemon and onion, which, during August, will continue with high prices, warned the president of the Central Reserve Bank of Peru (BCRP), Julio Velarde.
As La República announced, the price of lemon It has risen by up to 200% in the last two months, and the kilogram is now worth up to S/9.00 in some retail markets; while the onion also touches the threshold of S/10.00 per kilogram.
“Products such as food and energy, do what the BCRP does, it is very difficult to control them. This month, we are going to have a strong increase, which we are already seeing, in lemon and onion. Almost all inflation will be explained by these two products for this month,” Velarde said at the 2023 Economic Forum, organized by the American Chamber of Commerce of Peru (AmCham Peru).
be careful
After inflation skyrocketed to 8.46% in 2022 —the highest rate in nearly three decades—, the banker pointed out that we reached the peak in August of said year (8.8%); however, it has been “low inflation compared to the entire region.”
Lemon price increased by S/11 per kilo in various markets of the capital. Photo: diffusion
Now with year-on-year inflation at 5.88% at the end of July, he considered that “such high levels” had not been reached, so the BCRP did not have to raise the interest rate, which has been at 7 for seven months. 75%
“And that’s why we don’t have to rush to lower (the referential interest rate) as fast as other (countries),” he said.
What would happen if the reference rate were lowered quickly? Velarde He explained that not only would inflation rebound, but more severe measures would be taken that would throw “a greater recession.” Such a scenario has already been foreseen by economies such as the United States, he noted.
On the other hand, Velarde recalled that inflation without considering food and energy is “quite controlled.” Currently, it stands at 3.9%, and is, together with the total, one of the lowest in Latin America.
Lemon and onion double their prices and cost between S/9 and S/10 per kilogram. Photo: diffusion
“There is no technical recession”
Velarde acknowledged that despite the economy crash During the first half of the year, it is not necessary to say that we are in a technical recession, because factors such as formal employment, long-term business expectations and private consumption have been recovering.
He estimated that the GDP will grow around 2% in the third quarter, and close to 4% for the fourth. He did not specify which sectors would drive this result.
“Mining projects are missing”
He BCRP Mining investment is expected to fall by close to 20% this year and, according to Velarde, the lack of large-scale projects affects this indicator, which in 2019 mobilized US$5,909 million and, for the present, is estimated to close in US$ $4.670 million.
Projects such as Zafranal and Inmaculada are “relatively small” and, therefore, “it is a pity” because the demand for copper is going to recover “strongly” despite the economic slowdown in China, since “the manufacture of electric cars requires four times more copper than to make a traditional car”.
The word
Julio Velarde, President of the BCRP
“Products such as food and energy, whatever the BCRP does, it is difficult to control (…) Almost all the inflation It will be explained by these products (lemon and onion) this month”.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
