Fin Min: Peru on right track in Bicentennial

Photo: ANDINA/Presidency of the Council of Ministers

Photo: ANDINA/Presidency of the Council of Ministers

10:31 | Lima, Jul. 16.

Expectations are positive and the figures prove so. In May 2021, Peru produced almost as much as it did in the same month of 2019, a pre-pandemic year, Economy and Finance Minister Waldo Mendoza has reported.

Better results are expected due to the increase in economic activities and higher international commodity prices. Thus —at the end of the present year— tax collection will also rise, which will be one of the highest in the country's history, the government official said in remarks to Andina news agency.

Can we say that there are greater signs of recovery based on the economic indicators of recent months?

We are fine. The economic recovery exceeds our expectations, and the figures prove that. During the first quarter of 2021, the economy grew and even matched the same period in 2019, which was a normal year.

Obviously, it is not an acceptable comparison because May 2020 was a very bad month, in economic terms. Thus, this increase should not be taken with great enthusiasm.

If we compare this result with that of May 2019, the decline was very slight (0.4%). It means that, in the fifth month of 2021, Peruvian economy produced almost as much as it did in the same month of 2019. We are on the right track.

It is likely that we (Peru's economy) will grow above these estimates, in particular, because vaccination is advancing rapidly, and it will mean that, towards September or October of this year, a part of the population will have received these (both vaccine) doses. Thus, economic activities will be able to reopen with a little more confidence, as in the case of some cinemas, theaters, and restaurants.

This is added to the fact that companies were protected this year and the previous one by the significant injection of credits, which enabled them to get through bad times. In terms of production, expectations are very good.

GDP in May registered an expansion of 47.80%, but what is the result with respect to pre-pandemic figures?

We must carefully evaluate the economic figures for this year because, if we compare them with a period characterized by many problems, we will come out very well; therefore, growth will be very high, between 30%, 40%, and even 80%.

It is important to analyze the results and compare them with the same months of 2019, which was a normal year. In the case of the figure for May 2021, it merely fell by 0.4%; that means we are already producing almost the same as in the fifth month of 2019.

Furthermore, we see strong recoveries, even if compared to 2019. That happens, for example, with the construction sector, which grew 20%.

On average, the economy advances and if our projections are met, we can say that in one year we would have recovered a large part of what was lost in 2020 —a result that few countries in Latin America will be able to show.

What should be the new engines of growth?

Commodity-based growth should not be underestimated. Mining is very important for the country; we must continue to protect it, as well as agro-exports, but Peru —in addition to minerals and having an immense coastline for large-scale agricultural production— has other riches which were not properly taken advantage of.

We should add other engines that will also allow a geographical reincorporation of the Peruvian population.

For example, Peru has a huge potential for archaeological sites that are under-exploited. Despite the fact that we are one of the world's leading producers of fishery products, aquaculture is lagging behind —an activity that means kind of the industrialization of this sector.

This is also the case in the forestry industry. Peru has extensive forests to exploit and export wood; on the contrary, we import it.


Published: 7/16/2021
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