The World Bank kept its economic growth projection for Peru at 3.2% for this year. Despite cutting the forecast for the global economy.
Meanwhile, for 2023, the institution estimates a growth of 3% for the Peruvian economy.
“In Chile and Peru, strong cyclical rallies in 2021 are projected to soften in 2022. In Peru, deterioration in business confidence is expected in the context of great political uncertainty, coupled with the recent reestablishment of fiscal rule, propitiate a growth deceleration ”, he detailed.
Regarding world growth, he warned that it will slow down this year and the situation could worsen due to the impact of the omicron variant of coronavirus, which spreads accentuating labor shortages and logistical problems.
The entity revised down its forecast for global GDP growth for 2022 by 0.2 percentage points, to 4.1% after 5.5% in 2021.
“Economic shocks caused by omicron could further reduce global growth this year, by an additional 0.2 to 0.7 percentage points, to 3.9% or even 3.4%,” the agency added.
He noted that in a worst-case scenario, most of the impact would be felt in the first quarter of 2022, followed by a notable rebound in the second quarter.
Ayhan Kose, head of forecasts at the World Bank, said that the fourth wave of covid causes for the moment fewer restrictions than that of 2020 “and if the outbreak were to diminish soon, the economic impact would be rather slight.”
However, “if the omicron variant was consolidated over time, with a high number of infections and pressures on the health system, then growth would be weaker.”
In this case, labor shortages would increase, further disrupting global supply chains and fueling higher prices.
Faced with rampant inflation, the US central bank could brutally raise benchmark interest rates, raising the cost of borrowing for emerging countries, already with record debts.
In this context, business and household confidence could erode. Ultimately, consumption and trade flows, which are the engine of global growth, would be affected.
By 2022, the World Bank has already revised world trade volume growth down to 5.8% (-0.5 percentage points) after a 9.5% rebound last year.
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