Biggest GDP drop for Peru in decades due to lockdown

RIO DE JANEIRO, BRAZIL – (AFP) Peru’s economy shrank in 2020 by its biggest margin in three decades on the back of a months-long lockdown to try to contain the coronavirus outbreak, the government said Monday, February 15th.

The GDP drop of 11.12 percent was smaller than predicted by Peru’s central bank, but the largest decline since 1989 when the economy contracted by 13.4 percent at a time of hyperinflation and guerrilla warfare.

It comes after 22 years of uninterrupted economic growth, according to the National Institute of Statistics and Informatics (INEI), and decades of better GDP figures than the Latin American average.

Scores of hotels, restaurants, and tourism-related businesses in Peru went bankrupt by the time a strict lockdown that lasted more than 100 days was lifted in July last year.

Official data said nearly half the country’s economy was paralyzed during this time.

The announcement came as numerous Peruvian regions, including the capital Lima, are under fresh stay-at-home orders to curtail a second pandemic wave that has seen infections quadruple since December.

The INEI said the worst-hit sector was accommodation and restaurants, down 50.45 percent.

Other sectors that suffered included: mining and hydrocarbons, transport and storage, manufacturing, construction, commerce, and utilities.

Telecommunications, public administration, fishing, and farming showed growth.
Peru has one of the world’s highest per capita death rates from the virus, with more than 43,700 deaths from 1.23 million confirmed cases.

On a positive note, the INEI said Peru’s economy grew 0.51 percent in December after nine consecutive months of decline.