After Cyclone Yaku, a possible Coastal Child would affect 16.7% of GDP and 20% of formal employment

Heavy rains due to the effects of Cyclone Yaku They affect various regions of the northern Peru which caused rivers to overflow, bridges to collapse, thousands of homeless people and dozens of deaths; It has even had an impact on the prices of some staple foods.

Waiting for this tropical climate phenomenon decrease its intensity, so far the possibility that a phenomenon of “The child of the coast”which is subject to a ‘watch alert’ system by the Multisectoral Commission for the National Study of the El Niño Phenomenon (Enfen).

And in the face of a possible phenomenon of “The child of the coast”he Institute of Economics and Business Development (Iedep) of the Chamber of Commerce of Lima (CCL) warned that this would mainly affect five regions of the country, which contribute about 16.7% of the total GDP, which would affect a reduction in the growth rate of the economy by up to 0.4 percentage points in 2023.

It should be noted that, according to Enfen’s analysis, an entity attached to the Institute of the Sea of ​​Peru (Imarpe)there is a higher probability that anomalous sea warming will continue for the rest of the summer and into mid-autumn 2023.

“Given this situation, the most exposed regions are Tumbes, Piura, Lambayeque, La Libertad and Áncash, which also contribute 20% of formal employment and also have a level of poverty that reaches 1.5 million people. “, said the head of the CCL’s Iedep, Óscar Chávez.

According to the experience of previous years, there are four productive activities that would see their performance affected: agriculture, manufacturing, trade and transport. Together, the five regions contribute 25.5% of the national agricultural product14% of manufacturing, 16.4% of trade and 15.7% of transportation.

“And to agricultural activity will be affected, up to 37.8 million S/day may be lost in production, in particular due to the losses to La Libertad (S/15.8 million) and Piura (S/10.8 million),” commented the economist.

In the business dealdaily losses of S/39.6 million can be recorded, the most affected regions being Piura (S/12.2 million), La Libertad (S/10.3 million) and Lambayeque (S/9.9 million) and, to a lesser extent, Áncash (S/ / 5 million) and Tumbes (S/ 2.2 million).

Faced with this scenario, Iedep felt that it would be necessary to use fiscal resources it could come from Public budget contingency reserve 2023which amounts to 5,296 million S/.

Chávez specified that he would thus contribute to mitigating the effects of the phenomenon of “The child of the coast”in addition to the damage it could cause to physical and social infrastructure, especially those related to education and health, which would be the most affected sectors.

We must not forget that the gravity of “The child of the coast”in 2017, caused the Peruvian economy to slow down by 2.5%, after growing by 4% in 2016.

Given the intensity of Cyclone Yaku in the north of the country, Anaximander Rojas, President of the National Convention of Peruvian Agriculture (Conveagro)reported that the floods have ruined the harvest of rice, cotton and beans, a situation that represents a severe blow for agricultural producers.

“These products were already close to harvest, but they were lost due to the rains. This will directly affect the agricultural producers that they have taken out loans to develop their crops this year and this could affect the prices of certain products in the market,” commented Rojas.

In addition, the chief indicated that If these rains continue, the situation will be serious because they also interrupt the roads and do not allow the products to be removed from the field., which increases its price, as evidenced by the cost of lemons in the main food markets of Lima. “Lemon which used to cost 3 soles is now more than 7 soles, while rice which costs 3.50 soles could go to more than 4 soles,” he explained.