Private investment fell in 2022, what is expected now?

In 2022, GDP had a low growth of about 2.7%, according to the National Institute of Statistics and Informatics, with worsening consumption and investments.

Only in the case of private investment, the data show that in the past year they had drop only 0.3%, but in some months the result was worse.

In the last three months of 2022, private investment fell by 1.8%, and in the third quarter, the decline was 1%. Only during the first six months of the year was there a positive trend.

The deterioration in private investment mainly reflects the pessimism of companies, as pointed out by the head of the information system Macroconsult, Eduardo Jimenez.

Adding to these low expectations are risks social conflict and it is estimated that this could lead to another 4% reduction in private investment on average over the first three months of 2022.

“2022 has been dominated by firm pessimism, and now in 2023 Kellaweco’s departure will also be felt. There is room for improvement in the outlook, but that will only happen if the social risk dissipates and if Boluarte continues to adhere to the fundamental market rules, which has earned him some support in Congress. We are seeing more action from ministries to revive the economy through reactivation of projects or bonds, and this has a positive effect on changing the mood in business.” Jiménez told the Gestión newspaper.

Credicorp Capital Chief Economist Daniel Velandia agrees that pessimism It will continue throughout 2022.

Credicorp predicts that this private investment will fall by 2% in 2022, “mainly due to the risk of social conflict in the mining sector and as political uncertainty continues to weigh on business confidence. We don’t see the latter factor improving in the short term.”