:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/EEG4FLLV5VEXFCJJMUQQFXY5WQ.png "The Peruvian economy would have registered a sharp slowdown in January 2023, according to experts 1")
In January of this year, the peruvian economy It would have recorded a growth close to 0% due to social protests and roadblocks that spread from the southern zone to other parts of the country, according to estimates by the Scotiabank Economics Department.
Peru’s economy slowed more than expected in 2022
The recorded annual rate of 2.6% shows a slowdown in economic growth, partly explained by the acute social situation the country is going through, accompanied by shifts in the pandemic.
Due to this social problem, the bank explained that the most affected sectors were accommodation and catering, transportation, financial services there construction. Regarding the latter, local cement shipments fell 13% in January compared to the same month in 2022.
“Also mining production was affected by the temporary closure of the San Rafael tin mine (Puno) and the drop in copper production at Las Bambas (Apurímac), Antapaccay and Constancia (Cusco) due to blockages in the southern mining corridor” , explained Pablo Nano, economic analyst at Scotiabank.
Peru’s economy has lost over $2.6 billion due to violent protests and demonstrations
For the Minister of Economy and Finance, Alex Contreras, the political unrest of the last five years has posed a series of challenges to the economy. However, it turned out to be strong and resilient.
Given the sharp slowdown in Gross Domestic Product (GDP) from the country, ComexPeru explained that the economy started to lose momentum in the last months of 2022, which reduced growth to 2.7% at the end of the year.
“The violence behind the social protests continues to hurt the performance of several sectors. If this situation persists, the growth of the peruvian economy for the next few months it would continue to be limited,” the company union remarked.
For its part, Víctor Fuentes, director of the Peruvian Institute of Economics (IPE)predicts that the Peruvian economy during the first quarter 2023 it would continue to show a slowdown, mainly affected by the demonstrations in January and part of February.
Concerts in Peru boosted part of GDP growth in 2022, INEI says
Musical performances by foreign artists such as Bad Bunny, Daddy Yankee, Coldplay, Harry Styles contributed 0.73 percentage points to the total change in national production in 2022. Local artists such as Grupo 5 and Armonía 10 contributed also contributed to the economic activity of the country.
In this regard, the IPE economist indicated that cement shipments recorded a significant drop in January 2023, anticipating a decline in the private investment at the beginning of this year.
In this sense, Fuentes indicated that by the end of 2023, a growth in the PBI 2.1%, although with severe downside risks. On the one hand, the private consumption would have a marked adjustment to a reduction in purchasing power.
“There private investment would register a decrease in not being able to insert large-scale projects through the political instability. Besides, the public investment it would face serious risks in a context of new regional and local authorities,” said the IPE representative.
Despite this prospect, the Minister of Economy and Finance, Alex Contrerasis more optimistic about economic expectations of the country for this year, therefore, it foresees that the PBI would exceed 3.1% annual growth compared to 2022.
“At the level of Ministry of Economy and Financewe expect a “V” shaped recovery, December was a difficult month, January too, but from February we expect a significant recovery in the economy and it is not just expectations, but we are aligning policies on that goal,” Contreras said.
Furthermore, the head of the Economy portfolio explained that the main driver of the first quarter of this year who will hold the economic growth will be the consumption resilience, for which financial support will be provided to families; and the engine of public investment.
“In the meantime, we anticipate that from second trimester begin to reverse the fall of the private investment. The important thing is that we have a huge opportunity to continue to lead the region’s growth and continue to close the gaps, that’s what my portfolio is obsessed with,” the minister said.