Peru’s Central Bank revising its growth forecast downward for 2021 to 10.7%

RIO DE JANEIRO, BRAZIL – The Peruvian Central Reserve Bank (BCR) on Friday, March 19th, projected that Peruvian economy would expand 10.7% this year, revising down its previous forecast (11.5%). Nonetheless, it will be the one of the greatest expansion in South America during 2021, the BCR highlighted.

“For next year, we are forecasting a growth of 4.5%,” said BCR Governor Julio Velarde.

During the presentation of the Inflation Report for March 2021, the official said that primary GDP will increase 7.4% this year, whereas non-primary GDP will expand 11.7%.

“We have adjusted primary GDP to lower growth, basically due to a lower expected increase in mining (sector). Previously, we expected a 14.4% growth in mining, but now merely 11%,” he indicated.

“Concerning non-primary GDP, an 11.7% growth is being projected, basically derived from lower activity of some sectors during February,” he added.

The BCR official indicated that —in the first quarter of 2021— GDP is expected to grow 1.5%, followed by 39.7% (2nd quarter), 8.2% (3rd quarter), and 1.3% (4th quarter). “The recovery in the first quarter will be a little lower than expected due to the lockdown last February,” he explained. “GDP practically fully recovers this year, or in any case, during the first quarter (of 2022),” he added.

Velarde also considered that global economic dynamics will contribute to a more accelerated recovery of the national GDP. “The international winds are in favor of the rapid recovery of the Peruvian economy,” he stressed.