In February, Peru’s economy revealed a robust and unexpected surge, growing by 2.85% compared to the same month in the previous year.
This growth, reported by the national statistics agency, outstripped the median forecast of 2.1% growth anticipated by a Bloomberg survey.
The economy also expanded by 1.19% from the month prior, signaling a resilient rebound from what has been the second-deepest recession in over three decades.
This encouraging trend is the result of consecutive months of improvement, both from the previous year and the preceding month.
The government, along with the Central Bank, projects an optimistic future, anticipating a growth potential of up to 3% in 2024.
This comes after a challenging period marked by political unrest and severe weather, which had previously hampered economic progress.
A key driver of this growth spurt in February was the mining sector, which recorded a 16% increase over last year.
This refects a recovery from disruptions caused by significant anti-government protests during the same month last year.
These protests had a considerable impact, creating a low base effect that contributed positively to the comparative increase in economic output.
Amid these economic developments, the central bank executed a surprising rate cut this month.
This decision came despite persisting high inflation, which has yet to settle within the bank’s target range.
Nonetheless, the central bank remains confident that inflation will stabilize at around 2% in the near future.
Peruvian Economy Surpasses Expectations with February Growth
Alongside economic troubles, President Dina Boluarte confronts political issues due to a scandal involving her use of luxury Rolex watches, sparking accusations of illicit enrichment.
Boluarte has refuted any misconduct, stating the watches were borrowed from a political colleague.
Despite her rebuttals, public trust wanes as a recent survey shows that 92% of Peruvians doubt her explanation, with her approval rating tumbling to a mere 7%.
Peru’s path to stability and growth, amid economic and political challenges, showcases resilience and cautious optimism, highlighting the intricate relationship between economic and political factors.