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Peru's economy forecast to grow 3.3% in 2022, despite unfavorable external conditions

Photo: Ministry of Housing

Photo: Ministry of Housing

11:00 | Lima, Aug. 25.

Peruvian economy will grow 3.3% this year, mainly affected by temporary supply shocks that have had an impact on the performance of primary sectors in the first half of the year, the Ministry of Economy and Finance (MEF) forecast in its Multiannual Macroeconomic Framework (MMM) 2023-2026.

According to the government agency, external conditions are unfavorable due to the slowdown in external demand, the adjustment of commodity prices, and inflationary pressures.

"On the contrary, there are factors that will help counteract the negative effects in 2022 and sustain economic growth in 2023," the MEF stated.

Those positive factors are associated with:

i) Dissipation of social conflicts in the mining sector, which will result in greater copper production, thanks to the return to normal operations at Las Bambas mining project and the start of operations at Quellaveco as of the second half of 2022.

ii) The implementation of a set of measures that help boost private and public spending, and create an environment of greater confidence for investors.

iii) More dynamic economic activities affected by the pandemic such as trade, accommodation and restaurants, transportation, and services provided to companies, in a context of gradual dissipation of inflationary pressures and massive vaccination of the population, as well as the implementation of measures to promote the tourism sector.

iv) The recovery of domestic demand driven by the stimulation of investment and the resilience of private consumption. 

For example, public investment will be subject to the continuity of the implementation of projects with flexible mechanisms such as those of the National Infrastructure Plan for Competitiveness (PNIC), the Special Public Investment Projects (PEIPs), whose implementation will begin in 2022, and the Reconstruction (particularly the G2G Reconstruction Program).

(END) SDD/JJN/RMB/MVB

Published: 8/25/2022
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