After having admitted that Peru is in a recession, the head of the Ministry of Economy and Finance (MEF), Alex Contreras, gave an interview to The Republic and pointed out that this new scenario is due to the fact that there was a “deviation” in the economic projections for July and August, months in which the GDP had a fall of 1.3% and 0.6%, respectively.
However, after having anticipated that the September indicators would not be encouraging, Contreras Miranda added that the October rate would be slightly higher than that of the previous month. Likewise, he commented that the update of their projections will only be communicated at the beginning of 2024, when there is more information on economic activity.
“October is a little better than September, but August and September we have said that the indicators were a little weak. Officially we make two reviews, one in August and another in April, but in order to continue being transparent and more proactive, we are going to advance this update of projections for the month of January or February,” Contreras Miranda told this medium.
The official also specified that the MEF has not expected that the economy enters recession to only implement policies that promote reactivation, since measures have been applied since the beginning of the current administration.
“Many have thought that the MEF has waited to recognize that we are in recession to act and that is not true, because since the beginning of the administration the central objective has been to promote reactivation and increase potential growth,” Contreras emphasized.
Regarding whether he considers that 2023 is a lost year in economic matters, the head of the MEF highlighted that it seeks to continue on the path of recovery and the actions that will be promoted seek to prevent the GDP enter “a phase of longer stagnation.
Stagnant private investment
According to the Minister of Economy, private investment in Peru has been stagnant since before the pandemic, to which is added a stage of low economic growthaffected by the health emergency, social conflicts and political crisis.
“If we take stock in recent years, private investment, if you clean up the pre- and post-pandemic period, has been stagnant from 2015 to 2019; if you look at the growth rate, the average is even negative, we have lost a lot time. I would say that The country made significant progress, but in the last five years we entered a very complex phase in terms of growth. I would rather say how we recover these five years that for different reasons we have not been able to advance, the pandemic has been one factor, political instability has been another, the transitions, the institutional changes,” concluded Alex Contreras.
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.
