Peru lowers GDP growth forecast to 3.3% in 2022

Peru’s Ministry of Economy and Finance (MEF) on Thursday revised downward its growth forecast for Peru’s gross domestic product (GDP) to 3.3 percent by the end of the year from the original 3.6 percent.

In the document Multiannual Macroeconomic Framework (MMM) 2023-2026, the portfolio explained that the Peruvian economy was mainly affected by “transitory supply shocks” that affected the performance of primary sectors in the first half of the year.

The economy was also affected by unfavorable external conditions due to the slowdown in external demand, the adjustment of commodity prices, and inflationary pressures.

The head of the MEF, Kurt Burneo, published an article in a local newspaper in recent days saying that after taking office on Aug. 5, he came across official forecasts that pointed to “very low” GDP growth, which would only be between 2.4 and 3.4 percent.

The MEF argues in the MMM document that despite the downward forecast, there are factors that will “counteract the negative impact in 2022” and sustain economic growth in 2023.

These factors, it said, are associated with mitigating social conflicts in the mining sector, implementing measures to increase private and public spending, and greater dynamism in the sectors of the economy affected by the pandemic.

The institution noted that the 3.3 percent growth projected for 2022 is based on the resilience of domestic demand and higher export volumes and measures to increase the economy’s productivity and competitiveness.

The Peruvian government lowered other projections, such as exports, from 7.8% to 4.8%, while imports fell from 4.7% to 3.4%.

For private investment, the projection remained neutral, while public investment declined from 11% to 8.5%.

In a technical report released a few days ago, the National Institute of Statistics and Informatics indicated that the Peruvian economy grew by 3.54% from January to June 2022, with a growth of 3.44% in the sixth month of the year alone.

The Peruvian economy, one of the countries most affected by the new coronavirus disease (COVID-19) in Latin America, recorded a growth of 13.31 percent at the end of 2021, after a decline of 11.12 percent in 2020.