After the political, social and environmental shock that sank, in 2023, the GDP Peru to its worst result in more than two decades – not counting the pandemic – at least the factor linked to the weather seems to have moderated and would not imply risks for this year’s path.
The Central Reserve Bank of Peru (BCRP) points out that until July 2024, both El Niño and La Niña are expected to be neutral and, if they occur anyway, they would be weak.
In that context, The issuing entity expects that interannual inflation will continue to decline: As of January, it was already at 3.02%, the maximum threshold of the target range – set at 1% and 3%.
In its recent Monetary Program, the BCRP argued that the inflationary decrease is due to the fall in food prices, since June 2023, after restrictions on its supply. In this component, the inflationafter having even doubled the general rate and reached 11%, is now at 4.3%.
“It is expected that climate shocks will begin to dissipate, which will allow production and employment to recover; and in that environment of starting to grow again, it will help to regain confidence,” said Adrián Armas, central manager of Economic Studies at the BCRP.
Even Armas recognized that, if he presented himself weakly The girl —counterpart of The boywith which, instead of rising the temperature of the seas, it falls—, would have “even net favorable effects on the economy.”
Will the reference rate continue to fall?
When El Niño Costero broke out at the beginning of 2017, the reference interest rate fluctuated around 4%. Now, with climate threats reduced, the BCRP barely reduced the reference rate by 25 basis points: from 6.50% to 6.25%.
Armas, when asked by La República about whether this slight reduction gives rise to a new normality in the rate that governs access to credit, managed to say that “each economic situation is different”, and beyond the similarities between The El Niño of seven years ago and that of 2023 will continue to monitor the indicators “month by month” as inflation continues to reduce.
Let us remember that, as a result of the pandemic, the BCRP took the reference rate to the edge of 0% to facilitate liquidity in the Peruvian market, and in the face of subsequent inflation, it took it to a ceiling of 7.75% in January of last year. .
The first step of recovery
- Armas stressed that for the first quarter of 2024 it is expected to resume the growth path, after four similar negative periods.
- January, for example, considering the INEI economic forecast data, shows that “construction had a significant recovery.”
- In the December 2023 Inflation Report, Julio Velarde estimated that in the first quarter the GDP will rise 0.7%, and would progressively reach 4.8% towards the fourth.
- With a less aggressive El Niño, agriculture and fishing would have a vigorous recovery.
Source: Larepublica
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