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For years, Peru’s economy was stable in the face of various political crises and achieved sustained growth that only the pandemic could pause, but the climate of violence and protests in the streets seems to have ended up discouraging growth and putting much of it on hold. of the activity.
A crisis that continues. With dozens of deaths in the latest anti-government demonstrations and around 300 million dollars in losses, analysts are already forecasting a slowdown in the Peruvian economy and a drop in GDP growth to 2.5% in 2023.
“The scenarios that are open are multiple, but none positive. That growth of around 2.5 or 3%, being optimistic, now is the best you could hope for in the short term, because all the scenarios are with downside risk “, commented the former Minister of Economy (2014-2016) Alonso Segura.
The Peruvian economy grew 2.9% at the end of 2022, despite allegations of corruption and requests for the removal of then-president Pedro Castillo, who was ultimately removed from office and arrested for trying to dissolve Congress.
Protesters call for Boluarte’s resignation
Since Castillo’s vice president, Dina Boluarte, assumed the head of state and presented a cabinet of technicians, she promised to restore calm to economic actors and relaunch a package to reactivate stopped public works.
But the streets erupted in the south of the country, where there are important mining and gas deposits, demanding new general elections, a constituent assembly and the resignation of Boluarte for allegedly having betrayed Castillo.
Segura noted that there are “too many variables that are in the air, that all of them generate two things: very strong uncertainty and discontinuity in terms of productive capacity”, especially in activities such as mining, hydrocarbons and agriculture.
“Unfortunately, a large part of the Peruvian left is using people as cannon fodder, in order to achieve their ideological and political objectives,” said the economist.
For the Institute of Economics and Business Development, Iedep, of the Lima Chamber of Commerce, the economy would slow down in 2023, with growth of around 2.4%.
He attributes this behavior to the “complicated local scenario” and despite the fact that mining, one of the sectors most affected by the protests, would achieve an estimated increase of 5.7% due to the entry of new copper units.
The Services sector, which contributes half of GDP, will fall to 3.1%, according to Iedep its recovery is “conditional on social stability that guarantees the freedom of its operations in the country’s regions”.
Last month, agency S&P Global Ratings downgraded Peru’s long-term foreign currency debt rating to negative due to further political impasse. Fitch Ratings also lowered Peru’s rating to negative in October due to a deterioration in political stability and the effectiveness of the Government.
with EFE
