Peru, the most pessimistic in the region about its economy in 2022 after Argentina

RIO DE JANEIRO, BRAZIL – With only days to go before the end of 2021, all eyes are already on next year. What is expected for 2022? The latest Gallup International Association (GIA) End of Year Survey (EoY) 2021 revealed that “fears of upcoming economic difficulties remain high and are steadily increasing.”

In addition, the pandemic still affects the world’s hopes, fears, and expectations, “but there are significant differences by region and by country.”

Read also: Check out our coverage on Peru

Globally, for example, 41% of people stressed that – compared to 2021 – there would be economic difficulties next year in their country. This percentage is just four percentage points (pp) less than in 2020 (the year in which the coronavirus pandemic hit the world hardest).

Where does Peru rank? The EoY measured 44 economies worldwide, and if we order from highest to lowest the percentages of those who consider that next year will be challenging, we obtain that Peru is in 19th place.

Specifically, 44% of Peruvians commented that 2022 -compared to 2021- will be a year of economic difficulty. Suppose we only review the results of the Latin American countries considered in the EoY (Argentina, Colombia, Ecuador, Mexico, and Peru). In that case, we obtain that Peru is the second most pessimistic after Argentina (where 47% responded along the same lines).

PERU AND ARGENTINA

What is the current situation in Argentina and Peru? Already, different analysts estimate that in 2022, the Peruvian economy will only grow between 2% and 3%, well below the projections of the Ministry of Economy and Finance (MEF), which in its Multiannual Macroeconomic Framework (MMM 2022-2025) expects a 4.8% GDP growth next year.

Compared to the 13% rebound expected for this year, this projected slowdown is based, above all, on zero growth or deterioration of private investment (which affects the generation of quality jobs and does not allow a rapid exit from poverty).

In the case of Argentina, after a 9.9% drop in its economy in 2020 (during the crisis caused by the covid-19 pandemic), a rebound of 8.6% is estimated for this year; but -similar to Peru- a GDP expansion of only 2.3% in 2022, according to the consensus of analysts (FocusEconomics Consensus Forecast LatinFocus).

HAPPINESS INDEX

The survey not only measured economic prosperity but went further: it evaluated the “happiness” and “hope” (see linked) of the economies.

Thus, it was revealed that 56% of people in the world -surpassing the 2020 result- indicated feeling happy or very happy with their lives. In fact, despite the context and the situation, Latin Americans are the ones who feel happiest: 70% on this side of the world responded along these lines, exceeding the results achieved elsewhere; for example, in Europe, it was 52%.

In detail, people in Colombia (83% declaring to be happy), Kazakhstan (81%), Albania (74%), Malaysia (78%), Nigeria (78%) are happier, according to their self-assessment.

What about Peru? If we analyze the 44 economies through the Happiness Index, the country is placed as the 12th happiest in the world -according to its self-assessment-, together with Japan (both registered 61 points). With this, it surpassed -in the score- the result of 2020, when Peru reached 49 points.

Peru would be the third happiest in Latin American countries after Colombia (79 points) and Ecuador (73). In detail, 16% of Peruvians indicated that they feel very happy with their life, and 49% stated that they feel happy (65% between the two). Even so, it was shown that there are also 29% who mentioned not feeling happy or unhappy with their life; and 4% said they felt unhappy or very unhappy.

MEXICO AND ECUADOR ARE THE MOST OPTIMISTIC COUNTRIES

The health and economic crisis hit the world hard in 2020, and so far -in many cases- it is still trying to recover from this impact. Added to this are the challenges faced by individual countries internally, their own challenges, and risks.

Despite the above, there is still “hope” for what 2022 will be – in general terms. When asked whether next year will be better, worse, or the same as 2021, the Hope Index – part of the GIA EoY – showed that the five most optimistic countries are: Indonesia (72), Albania (65), Azerbaijan (53), Nigeria (51), Mexico and Vietnam (both with net scores of 47).

However, the top five pessimists are Turkey (-34), Bulgaria (-34), Afghanistan (-32), Poland (-30), and the Czech Republic (-25).

And Peru? The country achieved a net score of 30, which places it in 14th place out of the 44 economies considered.

Specifically, 44% of Peruvians said they were optimistic about 2022, while 14% said they were pessimistic.

With these results, Peru is the third most optimistic country in the region (of the five measured). Mexico and Ecuador achieved the best scores; both economies have more than half of their population optimistic.

THE KEY POINTS

1. Latin America. In their opinion, for 30% of Latin Americans, 2022 will be a year of economic prosperity -compared to 2021-; while 37% indicated that it would be a year of economic difficulties.

2. Colombia. The country ranked first worldwide in the Happiness Index 2021 (Happiness Index), while Ghana is last.

3. Hope index. The global average shows that 38% of people are optimistic about 2022, but there are 28% who are pessimistic and 27% are “neutral” (will remain the same as this year), according to the Hope Index.