The Central Reserve Bank of Peru (BCRP) has adjusted downwards its economic growth projection for the current year, placing it at 0.9%.
According to Julio Velarde, president of the monetary authority, the cut is mainly due to a greater effect of coastal El Niño and the persistence of low consumer and business confidence.
“Today we are in a contraction of 2%. That is largely derived from the droughts in the south at the beginning of the year, but fundamentally from the effects of El Niño, in the north,” he commented during the presentation of the September 2023 Inflation Report .
According to Velarde, this weather event has had a direct impact on food production, especially on the price of products such as lemon, which has experienced an increase in cost. In addition, the fishing industry has also been notably affected, with an expected drop of 27% in this sector. “This obviously also affects non-primary manufacturing, in this case fishmeal,” he stressed.
Julio Velarde highlighted that the Peruvian economy has faced a type of “confinement” due to these factors, which has affected a wide range of economic activities. Even companies not located in drought- or fishing-affected areas have faced difficulties selling their products and transporting goods.
“In manufacturing we are now expecting it to fall 3.5% before growth was 0. In general, this causes GDP to grow 0.9%,” he pointed out.
Source: Larepublica
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