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BCP: Peru's economy to grow 30% in 2Q 2021

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09:08 | Lima, Mar. 3.

The Peruvian GDP will experience an expansion of 30% in the second quarter of this year compared to the same period of 2020, BCP Economic Studies Department Manager Carlos Prieto has projected.

This result has a statistical effect as the quarantines implemented over recent months had an impact on the economy, the officer said during the presentation of the quarterly report crafted by the financial institution.

Within this framework, Prieto forecast that —during the first three months of this year— GDP decreased 1.5%, considering the confinement in force last February and the projection of a significant rebound for the current month.

Likewise, the officer informed that BCP maintains the GDP projection of 9% for 2021 due to internal and external factors.

Among the external factors —to favor the increase in GDP— he highlighted the recovery of world's economy and of the main trading partners, in addition to the good performance of commodities, among which copper stands out, whose price is at its highest level in almost 10 years.

Increased capital flows to emerging markets —like Peru— in search of good yields will also contribute to this favorable outlook, said the BCP Economic Studies manager.

At the local level, the Central Reserve Bank (BCR) and the Ministry of Economy-Finance (MEF) continue to adopt monetary and fiscal stimuli to mitigate the risks of the lockdown adopted last February, he noted.

Downside risks

The BCP officer commented that there are downside risks to the 2021 growth projection.

"If the duration and intensity of the second COVID-19 wave is similar to that of the first wave, new restrictive measures cannot be ruled out," he indicated.

In addition, the outlook for the coming general elections in the country —scheduled for April 11— "is still uncertain."

Lastly, Prieto estimated that the Peruvian economy will grow 4% in 2022 and 3% in the medium term.

(END) MMG/SDD/WRR/MVB

Published: 3/3/2021

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BCP: Peru's economy to grow 30% in 2Q 2021

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