CCL: Peru is the third country in the region with the best macroeconomic performance

The Lima Chamber of Commerce (CCL) reported that Peru is the third economy in Latin America and the Caribbean with the best macroeconomic performance, surpassing Mexico and Chile. The union assured that our country occupies this position “for now”, so it could continue to escalate in the coming years.

Through a report prepared by its Institute of Economics and Business Development (IEDEP), the CCL stated that our country obtained a score of -7.7 after being evaluated together with twenty-two economies of that region in the Macroeconomic Performance Index (MPI) 2021.

“The main strength of our country is centered on the projected growth of 12.8% for this year, however, the high inflation projected at 6.1% is one of the main weaknesses that, together with the fiscal and external deficit of 4% and 1.7% of GDP, respectively, affect the Peruvian MPI ”, said the head of IEDEP, Óscar Chávez.

Ecuador and Paraguay led the 2021 IPM by obtaining a score of -4.2 and -7.3, respectively, countries that are also implementing policies to attract investment and expand their economy, something that has not been happening in Peru.

At the other extreme, the lowest performing economies in 2021 were Argentina (-56.8) and Venezuela (-2751.3), drowned, above all, by high inflation. Colombia (-24.1) and Brazil (-23.1) have also lagged considerably behind in the MPI due to double-digit unemployment rates according to information from the International Monetary Fund.

CCL: How did other countries fare?

In the case of Ecuador, its low inflation (1.8%), its low fiscal deficit (2.3% of GDP) and an external surplus of 1.7% of GDP stood out, benefiting from the evolution of the price of oil, which, as of November, it had increased by 62%. However, his estimate of GDP growth, of around 3%, will not compensate for the 7.8% drop recorded in 2020.

For its part, Paraguay was boosted by a growth of 4.5% and an external surplus of 3.5% of the product. “In this case, the country benefited from the increase in the prices of agricultural commodities such as corn, wheat and soybeans. However, their problem is focused on the fiscal deficit of 5.2% of GDP ”, commented Óscar Chávez.

In the case of Mexico, it obtained a score of -8.0, ranking fourth, with a 6.2% growth projection for this year and an external balance equal to zero, but an inflation of 5.9% and a deficit 4.2% of the product, affect its MPI.

While Chile, with a result of -13.9, ranks fifth in the region where its strengths are focused on its projected growth of 11.0% but affected by unemployment close to 10% as well as a fiscal deficit (-7 , 9%) and external (-2.5%) both expressed as a percentage of the product.

“The results obtained do not mark the trend that the economy will follow in the long term. Peru is the fifth among ten countries with the highest GDP per capita in the region and represents just over 50% of the region’s leader, which is Chile, ”the report concluded.

CCL: What is the IPM?

The MPI is an indicator prepared on the basis of the Misery Index created in the sixties by Arthur Okun and which was estimated by adding the unemployment rate and the inflation rate.

This also considers the growth rate of the product, the fiscal saving expressed as a percentage of GDP and the current account of the Balance of Payments as a percentage of GDP.