Andina

MEF: Peruvian economy might grow above 3.1% in 2024

Photo: ANDINA/Lino Chipana

16:00 | Lima, Jul. 17.

Economy-Finance Minister Jose Arista on Wednesday indicated that, following the GDP rate above expectations registered last May, Peru's economic activity might grow above 3.1% this year.

"Our projection is around 3.1%, matching with the Central Reserve Bank (BCR). However, internally, we are confident that this growth will be (higher) by a few percentage points," he said in remarks to TVPeru.

The Cabinet member underscored that the 5.04% GDP growth last May was the second highest in 2024 over the past three years —a figure that most private economic agents had not expected.

"We have registered a 5.04% growth in May, which is the second highest after April (5.28%) and after almost three years; that means 34 months without growing at a significant rate," the Cabinet member said.

"In general, everyone who engages in forecasting ahead of time encounters some tenths of errors. At the Ministry of Economy and Finance (MEF), I have stated that we will compile a ranking of all entities that issue forecasts and how much they deviate. However, each entity uses different methodologies and some indicators are more reliable than others," Arista explained.

"For example, BBVA uses a program called Big Data for their projections; so, they issue their projections based on it. The Central Reserve Bank (BCR), besides mining data, conducts analysis based on surveys. We focus on independent indicators like electricity, consumption, billing, and revenue; so, each entity has its own methodology," he said in detail.

The minister highlighted that economic growth last May was more even in most productive sectors, which had not been observed in the April record.

"This growth last May was more uniform. While April showed some leading sectors and others lagging behind, I was pleasantly surprised in May by the even growth across all sectors, except for the financial sphere which declined," Arista explained.

"It (the result in the financial sector) was primarily because banks are being somewhat cautious; bankers tend to be more conservative. Besides, the Central Reserve Bank (BCR) has kept its benchmark interest rate at 5.75%, without lowering it, despite inflation rates being significantly lower, but that is the BCR's policy, and its goal is to control inflation. It's important to keep these functions separate, which is appropriate, and the Central Bank always does a good job," he concluded.

(END) CNA/MVB

Published: 7/17/2024