Fiscal Council: “Economic growth projections of the MEF and BCRP are unfulfillable”

He Fiscal Council — an autonomous entity established by law — considers that the economic growth forecasts of the Ministry of Economy and Finance (MEF) and the Central Reserve Bank of Peru (BCRP) are not realistic.

“The economic growth forecasts for the short term, this year and 2024, which are 1.1% and 3.0% (according to the MEF’s Multiannual Macroeconomic Framework) are quite optimistic. In fact, 1.1% for this year is unfulfillable. The BCRP came out with 0.9% but it is not going to be met either. Growth will be below“, commented Alonso Segura, member of the Fiscal Council, before the Congressional Budget Committee.

According to Segura, The internal risks facing the economy are the deteriorated business expectations for two and a half years, which affect the climate for private investment and job creation.; added to the risks of social conflicts and still high inflation due to the threat of the El Niño Phenomenon.

In addition, he questioned that the MEF estimates that GDP will oscillate between 3.0% and 3.3% until 2027, since the “sustainable growth consensus” is half a point lower than said rate. “The potential growth without tailwinds or headwinds is 2.6%, which is very little to improve socioeconomic indicators. The MMM has projections of more than half a point, which is unrealistic with the absence of sustained tailwinds,” he mentioned. .

This cooling of economic growth indicators that will take us away from 3% in the coming years — Segura added — will translate into an increase in poverty and extreme poverty by putting food security at risk.

He Fiscal Council recommends to the Government “speed in preventing” the attacks of El Niño, and although there is no “magic wand” to rebound, the most important thing is to recover private investment since given the low collection “we expose ourselves to a weak fiscal position “.