Less than a month before the 200th anniversary of Peru's Independence Bicentennial (July 28),
After a 30% drop in the second quarter of 2020, national GDP also registered declines generated by the pandemic in the third (-9%) and fourth (-1.7%) quarters.
Why is the country recovering much faster? The answer put forward by the high-ranking official is the extraordinary expansion of credit to private sector companies.
In fact, private business loans reached an expansion of 24.6% in August 2020, in the midst of the pandemic.
During 2019 —a normal year— the growth rate of credit to the private sector was 6%. However, in 2020 —with the presence of COVID-19— that growth rate multiplied by four, reaching between 20% and 25 %.
"The companies did not stop receiving credit; that has kept them alive and prevented them from going bankrupt. Although, some companies in sectors, such as hotels and restaurants, obviously went bankrupt, the rest of the companies did not," said the minister.
"Peru implemented a credit policy supported by State guarantee, which —although it has a future cost— explains that notable growth in bank credit; it is the main variable why Peru is recovering faster than the rest of Latin America," Mendoza explained.