IMF forecasts growth of 2.8% in the Peruvian economy for 2022, below MEF announcements

The International Monetary Fund (IMF) anticipated that the Peruvian economy will grow by 2.8% in 2022, a figure lower than those recently projected by the Ministry of Economy and Finance (MEF), which expects growth of 3.5% and 4%.

In this way, our country would rank at the end of the year as the third country with the best Gross Domestic Product (GDP), only behind Colombia (4.5%) and Argentina (3%); and ahead of Brazil (0.3%) and Chile (1.9%); and we match with Mexico (2.8%). While by 2023, Peru would reach a production of 2.7%.

According to the multilateral entity, the economies of Latin America are losing strength after a strong recovery last year thanks to the growth momentum of trading partners, higher prices of raw materials and favorable external financial conditions.

However, the IMF warned that inflation threatens to become more widespread, although there is substantial variation across economies. As is known, the consumer price index (CPI) affected the largest in the region (Brazil, Chile, Colombia, Mexico and Peru), prices increased by 8.3% in 2021, the largest jump in 15 years and higher than in other emerging markets.

“Long-term inflation expectations remain relatively well anchored, reflecting confidence in monetary policy to bring inflation back on target. However, near-term inflation expectations are elevated, suggesting the need for continued vigilance and possible additional action by central banks in some countries.

Along these lines, the IMF highlighted the quick and decisive reaction of the central banks to the strong increase in consumer prices.

“In Brazil, Chile, Colombia, Mexico, and Peru, policy rates increased by between 1.25 percentage points and 7.25 percentage points over the course of 2021. This was often combined with forward guidance indicating further rate increases in the coming months”, highlighted the institution.

To this end, the countries of the region must simultaneously face three major challenges: ensure the sustainability of public finances; increase potential growth; and do so in a way that promotes social cohesion and addresses social inequalities.