Arequipa, Apurímac and Cusco do not recover production figures similar to those of the prepandemic

The economic recovery in the south was adverse this year. Cusco, Arequipa and Apurímac register the steepest falls in the country, after Madre de Dios. These figures have been compared with those of the 2019 period, when we did not have a pandemic. The negative growth of Madre de Dios comes from 2017, due to informal mining and the lack of productive engines.

According to the National Institute of Statistics and Informatics (Inei), the national GDP accumulated an increase of 0.8%, in the third quarter of this year, compared to the same period of 2019. However, most of the southern regions do not recover of last year’s losses.

For the Peruvian Institute of Economics (IPE), the first reason for the economic contraction is the negative performance of mining production. Obtaining copper, for example, registers volumes lower than those accumulated as of September 2019. The falls are recorded as follows: Cusco (-24%), Apurímac (-21%) and Arequipa (-12%). This is attributed to the social conflicts that prevented copper production in Las Bambas.

In Cusco, the impact is also related to tourism. The former Minister of Economy and director of Videnza Consultores, Luis Miguel Castilla, said that the recovery of the sector will still take time. The Bicentennial Observatory of his organization points out that the flow of foreign arrivals was reduced by about 87%. Most of them were destined for Cusco.

He said that mining and infrastructure investments such as the Chinchero Airport should be promoted. The imperial region is the fifth with the largest portfolio of mining projects in the construction stage, for a value of S / 2,296 million.

In the case of Arequipa, according to Inei, the fall is based on the construction sector, due to the low physical progress of works at the three levels of government. According to Consulta Amigable, the regional government of Arequipa barely spent 54.8% of its budget for works.

This year, work on the drinking water system in Majes and works on the Viscachani Callalli-Sibayo-Caylloma highway, as well as the reactivation at Minera Bateas and Compañía de Minas Buenaventura seek to reverse the indicators, but it is still not enough for a recovery solid.

But the case of Puno is even more serious. The crisis in the regional government, which in three years had three governors, caused the economic delay. Only 37.9% of your project budget was executed. It is the most inefficient region in budget spending in the country.

Unemployment and informality

The Videnza Bicentennial Observatory reveals that unemployment and informality figures increased significantly. The unemployment rate is led by Arequipa (15.9%) due to the impact on predominant economic activities such as commerce, construction and services, which have been the most affected by mobility restrictions.

In the Cusco region, at the end of 2020 89.6% of total employment was identified as informal, which is why it ranks fourth in the national ranking of informality, followed by Puno with 89.42%.

2022 Outlook

For the former Minister of Agrarian Development and Irrigation, Milton von Hesse, 2022 will not be promising until there is a mention of private investment as an engine of economic growth and generation of resources for the treasury via taxes. “It is not yet realized that, if there is no private investment, there will be no greater production of goods and services and, therefore, there will be no more employment and there will be no higher tax collection so that the Government itself can carry out its activities. functions, ”he explained.

He criticized that in the energy and mines sector, no stability measure has been announced, except for “unilateral threats of mine closures and contract renegotiation.”

Likewise, the IPE warned that if the Las Bambas paralysis were to last throughout 2022, Apurímac’s GDP would fall by at least 60%. It considers that the outlook for the regions for 2022 faces a series of risks that could increase the gaps in the economic recovery.