BBVA Research continues to adjust downwards its growth projection for the Peruvian economy. It now foresees a drop in GDP of 0.4% – previously it expected an advance of 0.4% – and a rebound of 2% and 3.5% for 2024 and 2025, respectively.
This analysis responds to the “surprising” drop in national production in the third quarter, which confirmed three quarters in the red, a “worrying” trend. In addition, other factors were taken into account, such as the sustained weakness of private spending and the development of the El Niño phenomenon.
In this way, monetary poverty would continue to grow not only this year, but also in 2024 (29.6%). Thus, it will be 27.4% by 2028, seven percentage points higher than what was registered before the pandemic. For its part, inflation will close the year at 3.6%, and could even reach the target range (1%-3%).
About recovery
Yesterday the Minister of Economy and Finance, Alex Contreras, commented that the Christmas campaign will mark the beginning of the economic recovery in December. “We hope for a good campaign. December will be the start of the recovery, but we estimate a more important recovery in the first quarter of 2024,” he said.
However, for BBVA, we will still have to wait for the second half of 2024 to see signs of improvement, since the first part of the year will be impacted by El Niño. The 2% growth projection is supported by the beginning of a “normalization process”, since fishing and agriculture, for example, will have a slightly better performance than this year.
“And in 2025 that process will continue. We would grow 3.5% due to complete normalization. With the understanding that we will no longer have supply shocks and that the El Niño phenomenon will finally dissipate,” said Hugo Perea, chief economist at BBVA Research in Peru.
Data
Adjustment. The decline in inflation will allow the BCRP to lower the reference rate again in December to 6.75%.
Down. While the exchange rate would close 2023 between S/3.75 and S/3.85, according to BBVA.
Source: Larepublica
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