One in five Peruvians still has to reduce their expenses to make ends meet

One in five Peruvians still has to reduce their expenses to make ends meet, although the figure is still better than that of the first quarter of the year and was influenced by the withdrawals from CTS and AFP, which also do not leave much room for undertakings towards the end of 2024.

According to the study “1000 Peruvians Say” – OLA VIII, prepared by Omnicom Media Group (OMG) at the end of the first half of 2024, 37% of Peruvians said they were able to “save a little more at the end of the month,” a figure higher than the 22% recorded last March.

In addition, the number of Peruvians who said they were “barely making ends meet” dropped from 33% to 29%, while the number who had to cut back on spending to make ends meet dropped from 28% to 19%. The number of those who had to dip into their savings for the same purpose dropped from 15% to 9%. Even those who said they “could save a lot at the end of the month” increased from 2% to 6%. This is a recovery in solvency among those surveyed.

It should be noted that the study closed in mid-June, when the CTS and AFP withdrawals were already underway. In this regard, the report presented by Catalina Nino, research director of Omnicom Media Group Peru & Bolivia, shows that almost 50% of respondents were sure they would withdraw one of the two concepts, or both. Of the other 50%, 38% did not do so because they simply did not have any.

What did they plan to use this money for? 40% said they would use it to pay off debts, while only 27% were in favour of investing it in a financial institution. It is striking that 28% of Peruvians, although they were not sure, were considering making a withdrawal, but to save it on their own, that is, away from the entity where their AFP or CTS was deposited.

In contrast, there is a great deal of caution when it comes to buying goods (15%) or paying for services (9%) with these funds. This could translate into a drop in prices and greater liquidity at the beginning of the second half of 2024, which also reduced interest in starting a business before the end of the year from 53% to 47%.

Thus, all consumer expectations for this last part of the year (except having a child) have fallen, despite the withdrawal of CTS and AFP funds: starting a business, improving my lifestyle, investing in a financial product, buying a house, resuming or beginning higher education, purchasing a vehicle, etc.

Everything is going downhill: there is less and less hope of changing jobs, becoming independent, getting to know another country, and even getting married. The debts are gone, but there is still no room to do much more in 2024.