Michael Spence: “Peru’s GDP growth is respectable”

After the Peruvian economy contracted by 11.1% during 2020, the Nobel Prize for Economics Michael Spence affirmed that the projections made regarding the recovery are optimal.

“The decreasing trend could have been perhaps flatter –in comparison to the sharpened contraction in Peru compared to other neighboring countries–, but we see that the projected growth for next year is quite respectable (sic), 5% to 6% in view of the situation we are in. It is a fairly quick recovery, “he said in the framework of the XXXII Annual Research Seminar 2021 organized by the Consortium for Economic and Social Research (CIES).

These percentages estimated by Spence are similar to those discharged by entities such as the International Monetary Fund (IMF) and the Ministry of Economy and Finance (MEF): 4.6% and 4.8%, respectively. Meanwhile he world Bank and the Central Reserve Bank of Peru (BCRP) are more cautious: 3.2% and 3.4%, respectively.

On the other hand, the academic – who won the Nobel in 2001 together with George Akerlof and Joseph Stiglitz – recalled that, according to the Global Business Monitor (GEM), Peru still maintains its good reputation as one of the most entrepreneurial countries in the world, to the point of being ninth among 60 economies.

“This sustained rate, that is, the number of companies that have survived, is relatively high,” he summarized.

Gap reduction

Likewise, the nobel indicated that in the last 20 years there has been a notable reduction in the GINI coefficient in Peru.

“That is good in terms of cohesiveness and inclusive growth,” which represents improvements in social polarization and handling of governance problems. “It’s not that they don’t exist but the trend seems to be in the right direction,” he said.

However, the specialist regretted that in digital matters it is not yet at the same level as other countries, since the average internet speed is 6.2 mbps, which “is quite slow.”

The State – Spence continued – should invest more in infrastructure and in the digital ecosystem, so that the country does not lag behind, compared to other emerging economies, in the coming years.

Finally, he warned that the digital revolution will profoundly alter the evolution of societies and economies, to the point that in up to fifteen years, manufacturing production will demand much less employment, and the value chains and skills demanded will be completely different.

The data

Margin. By 2020, only 65.3% of the Peruvian population is an Internet user, emphasized Spence, who considered it important to increase digital penetration to achieve better growth patterns for the future.