The president of the Central Reserve Bank of Peru (BCRP), Julio Velarde, reported yesterday that private investment for this year would grow by 36% in real terms, which exceeds the 24.5% estimated in last September.
Along these lines, investment in the mining sector would also go up: from 18 to 22.8%; while in non-mining, it would go from 25.5 to 37.9% expansion. This would put an end to the negative figures left by the first year of the pandemic, where total private investment fell -16.5% and mining, -25.3% (see infographic).
What will come
However, he announced that for 2022 a growth projection of 0% is maintained for private investment.
“Some have believed that the Central Bank is saying that the investment will be 0%, and that is absurd. It would not be zero when mining investment, still important, grows at 3.4% basically due to Quellaveco and non-mining investment, contracting slightly by 0.4% ”, explained the banker.
By 2023, Velarde He emphasized that “a slight growth” of private investment is expected but “with a different composition”, given that mining investment will fall -16.7% due to a statistical effect before the completion of Quellaveco and because “there are still no big projects in sight.”
In that period the private investment would rise 2% and non-mining, 4.5%.
“Stability is required”
The highest authority of the BCRP stated that in our country “a certain predictable framework in legal and macroeconomic stability is required” for investments.
“We are taking this level of growth (in private investment) basically because of the expectations of the companies. We saw that after the announcement of the closure of mines, business expectations deteriorated. There is still mistrust, not the same as in August, but it does remain, “he said.
Velarde made official that the Peruvian economy will grow 13.2% this year – the last report was 11.9% – and for 2022 and 2023, it would be 3.4 and 3.2%, respectively, after the end of the pandemic.
Although, he emphasized that lower business expectations could affect economic activity for the fourth quarter of this year and next.
In addition, he explained that public investment for the next two years would grow by 4.5% and 1.6%, respectively. “The moderation in 2023 is due to the change in local authorities,” he noted.
Finally, the banker explained that the fiscal deficit this year would be 3.1% (less than the 4% reported in September), with Peru – along with Brazil – being the country with the fastest fiscal recovery in the region, after the contraction of -8.9% suffered in 2020.
Prudence increasing RMV
“One has to be prudent in these increases and studying the levels of productivity and how many are excluding, and recognizing that it is only going for a fairly small part ”, emphasized Julio Velarde after being consulted about the possibility of raising the Minimum Living Remuneration (RMV).
The banker explained that workers who earn between S / 930 and S / 1,000 are just over 10% of the formal population. Velarde argues that small businesses would be affected. “It is not that they are firing people, but that they will go informal. Whoever was on the payroll becomes black ”.
Julio Velarde, president of the BCRP
“Some have believed that the investment will be 0% and that is absurd. It would not be zero when mining investment grows 3.4% (in 2022) (…) There is still mistrust, not the same as August, but it remains ”.
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