Between the balance sheet and the economic projections, by José De Echave

It was known that 2021 was going to be a particular year for the Peruvian economy for several reasons. In the first place because of what 2020 meant, with an 11% drop in GDP in the midst of the pandemic and secondly because it was an electoral year and a change of government. At the end of the year, the balance sheets are started and the projections of the growth of the economy for 2022 also begin.

Regarding the balance, although everything indicated that there was going to be a rebound, not even the most optimistic ones projected the figures that will be reached this year. Some projections of former Economy ministers spoke of a growth of just 6%, however, the figures show that it will be above 13% and, as the president of the BCRP has pointed out, Julio Velarde, Since the third quarter, Peruvian GDP has already exceeded pre-pandemic levels.

The recovery is driven especially by the increase in domestic demand, record-breaking public investment and private investment, which will end the year with an increase of just over 12% compared to 2019 and 34.5% compared to 2020. At the same time that the fiscal impulse has been maintained to sustain the recovery, a process of fiscal consolidation has begun, significantly reducing the deficit to 3% of GDP, one of the lowest in the region. Macro-fiscal strengths have allowed the country to access low interest rates in the capital market: the November bond issue had high demand and favorable interest rates.

The BCR also highlights that the prices of our exports are in favor, which are at the highest point in recent years: this year, for the second year in a row, the record surplus in the trade balance will be broken with around 15.6 billion dollars. , almost double from last year.

Of course, it is still an uneven recovery, with sectors that are growing (construction, metal mining, among others) and others that do not finish recovering. Furthermore, employment has not yet reached pre-pandemic levels and inflation, although mainly due to external pressures, continues to be a matter of concern.

The 2022 budget, approved unanimously in the Congress It will be aimed at financing five priorities: health, education, agriculture, poverty alleviation and job creation. In health, the priority will be to attend to the health emergency, the development of strategic investments, the strengthening of capacities and advance in universal insurance. In education, the safe return to face-to-face classes, the maintenance of infrastructure and investments, and the strengthening of capacities appear as priorities. Agriculture also appears as a priority and it will seek to strengthen its competitiveness, research and innovation and the development of strategic investments. Regarding employment, it will continue with temporary employment programs, such as Trabaja Perú and in relation to poverty alleviation programs, it will continue with monetary transfers, via bonds such as Yanapay or those aimed at low-income public and private formal personnel. income.

Although the approved budget incorporates the largest increase in the last three years, the additional demands not covered are in the order of 60 billion soles. This is where the importance of tax reform lies, precisely to begin to close the enormous gaps that are creeping up on us. Carrying out a tax reform should be a basic agreement of all levels of Peruvian society: the tax pressure in the Peru it is increasingly far from the regional average; If in 2000 we were three points behind, today we are seven points below the Latin American average.

Peru cannot turn its back on global trends in taxation. Organizations such as the IMF, the World Bank and the OECD itself, point out that in the current context, countries must apply higher taxes for the highest income groups and the most profitable companies. In reality, the reform should allow us to recover the points that we lost in collection due to the disastrous tax policies that were applied between 2014 and 2016.

Furthermore, key sectors such as mining will not lose competitiveness; the reform is being designed with the support of organizations such as the IMF and the World Bank, that provide not only technical capacity but also analysis compared to other mineral producing countries. It is estimated that this year the extraordinary income from mining will be around US $ 13.6 billion due to the price factor. The country has the right to design instruments for a greater capture of the income of companies that exploit a non-renewable resource and that belongs to the Nation.

Finally, the challenge remains to sustain the growth of the economy in the coming years. Some project growth below 2% by 2022 (hopefully they will be wrong again), while the projections of the MEF and some international organizations point to a figure close to 4%. To achieve this goal, it will be necessary to continue managing finances responsibly, underpinning public investment and of course also private investment, and also, igniting other engines to begin to diversify the country’s productive matrix and make it more sustainable. Another key task for the Executive and Congress is to lower the political noise and give clear signals to continue promoting the recovery of the economy.