Peru’s GDP grew below the Latin American average in 2022

During the year 2022, the peruvian economy reached a growth of 2.7%, a figure lower than the average of 4.6% recorded during the previous two decades, indicated the Peruvian Institute of Economics (IPE).

This result from last year is due to the significant slowdown who showed the peruvian economy in the second semester. The progress of productive activity in Peru weakened further at the end of 2022 due to the effects of social conflicts in various productive sectors.

According to director of the IPE, Víctor Fuentesdespite the lesser dynamism of Economic sectorsmining ended 2022 with double-digit growth, mainly due to the start-up of the Quellaveco project.

Without considering 2020, the PEI He argued that 2022 was the first time in 18 years that Peru had growth below average. Latin American averagelower than the economies of Colombia (7.5%), Argentina (5.2%), Mexico (3.0%), Brazil (3.0%) and Chile (2.7%) .

“There political uncertainty and the social conflicts which affect confidence in the economy (business confidence with 22 quarters in pessimistic territory) in addition to the lack of world-class mining projects, after the start of operations of Quellaveco would have a significant impact on the private investmentsaid the IPE official.

Although Peru is still positioned as one of the countries to lower risk levels in the region, it is important to highlight that before the pandemic it had the lowest level of risk, while currently it is in second place, behind Chile, according to figures from the Central Reserve Bank (BCR) of Peru.

“Among the factors that explain this loss of competitivenesshighlights the political instability which, after worsening in the last months of last year, has caused a deterioration in the Peru Credit Rating Outlook by the rating agency Moody’s from stable to negative, at the end of January 2023. This implies that the perception of instability It is no longer recognized only by local investors, but also by foreigners,” said ComexPerú.

Likewise, the companies’ union said there was no doubt that the private investment It is extremely important for the country’s growth, because without it the performance of the productive sectors cannot be improved.

However, he clarified that the political crisis threatens the development of new investments in the coming months, with which it would grow less than the 1% estimated by the RBC by 2023. “Two consecutive years with zero or minimal growth in private investment would lead to a loss of international competitiveness for the country that is difficult to recover,” said Comex Peru.

Although growth forecasts for the Peruvian economy (2.3%) are weaker and “with a potential downward bias”, the agency Moody’s it still keeps the country above the expected growth for other countries in the region such as Colombia (1.5%), Mexico (2%) and Brazil (0.7%).

During this time, the Minister of Economy and Finance of Peru, Alex Contrerasestimated that private investment in Peru could grow by at least 3% in 2023, which would have a positive impact on the PBI of the country and put it back on the path to growth.

“This is the goal we have set ourselves, to grow private investment at least three% in real terms, and that’s why we’re asking for the delegation of authority which, quite simply, will generate a much more efficient pathway for projects to move faster, Contreras said.

In this sense, the head of the economy portfolio indicated that they are incorporating improvements in the time limit and in the obtaining licenses so that they allow some public and private investment project process to run in parallel and time can be reduced.