GDP fell for two months in a row, what does this mean?

The National Institute of Statistics and Informatics (INEI) revealed that the first two months of the year were negative for the Peruvian economy due to social conflicts and climate events.

In January, GDP, which measures national production, fell by 1.12%, and in February the fall was 0.63%. In general, there is a drop of 0.87% from January to February, what will be the result of the first quarter? Macroconsult Information System Manager Eduardo Jimenez explains the forecasts to us.

“Most likely, growth will be close to 0 or negative, even due to a sharp drop in January (…) In February, we unfortunately had a problem with rains, which hit the economy hard, in March we see more of this . that’s why March doesn’t sound very promising,” they noted.

At the moment, Macroconsult economist predicts that in the second quarter, growth economy it will be closer to 1.5-2%, despite the fact that April will still be slightly affected by rains.

The setback we have had so far this year, combined with low growth in the last months of 2022, does not show a very encouraging scenario for Peru, but could we be close to a recession?

Hugo Perea, chief economist at BBVA Research, elaborates that it takes more than six consecutive months of falling prices to fall into a recession. economical productionbut we are currently facing slower growth and less progress.

“Yes, we are seeing a slowdown that has already been going on since the second half of the previous year (…) After growing by 2.5% in the first half of 2022, the economy advanced by about 2% in the second half, this slowdown trend has continued to this day in this year and even exacerbated by specific factors such as social protests, political tensions,” he said.

For now activity Related to construction, telecommunications, finance and insurance are those that show the worst results at the beginning of the year.

In addition, there were also falls in the agricultural and manufacturing sectors in February. Economist Jorge González Izquierdo points out how this affects Peruvians.

“Last year we already grew 2.6% or 2.7%, and if we grow something similar or something less this year, it will be two years in a row. The first negative impact will be on poverty, reduction poverty It is unlikely that this will happen, the second blow is suitable employment, opportunities to find suitable work that allows you to live in dignity,” he said.

For now, economists are warning that we are facing very low CAGR for a country that has many gaps to close.

In addition, survey data now show that for six out of 10 Peruvians, mainly in Lima and the north of the country, economy Peru will not be reopened this year.