Central Bank of Peru lowers 2023 growth forecast to 2.2%

The Central Reserve Bank of Peru (BCRP) announced on Friday a reduction in the country’s growth projection for 2023 from 2.6% to 2.2% due to various factors including the climatic events of March.

BCRP President, Julio Velarde, during the presentation of the “Inflation Report June 2023”, explained that the decision also reflects lower domestic demand dynamism and social protests that took place in the first quarter.

Velarde underscored that climatic phenomena had restricted the production of both primary and non-primary sectors.

This is evident in the anchovy fishing industry, which has been canceled due to adverse climatic factors and could face more challenges with the possible arrival of the El Niño coastal phenomenon.

The growth of agricultural production was also downgraded, from 2.2% to 0.4%, “due to the climatic factors that partly affect growth”, Velarde stated.

Nevertheless, he emphasized that the metallic mining sector is growing more than expected, prompting an upward revision of the projection from 7% to 8.3%.

The entity chief also announced that they expect the annualized inflation rate at the end of 2023 to stand at 3.3% and to fall to 2.4% in 2024, thus aligning it with the target range of between 1 and 3 percent.

For June, he noted, they estimate that inflation “will be close to zero”, suggesting that the prices of the basic food basket could return to their usual index in the second half of the year.