Government maintains its growth forecast for this year despite negative global outlook

The government remains optimistic about the country’s economic growth expectations, despite the fact that the global context is not so positive.

During a meeting with the foreign press, the head Ministry of Economy and Finance (MEF), Oscar Graham, confirmed that Peru’s 2022 GDP growth forecast is still 3.6%.

“I remain optimistic about maintaining this level of growth. This is an optimism based on the information available to date on the restoration of mobility, the restoration of several Branches of the economy (…) and major projects that will give us a boost at the macroeconomic level,” the minister assured.

Graham insisted on the “sustainability” of the Peruvian economy and its financial soundness, but acknowledged that the external outlook was less favorable.

Currently global economy it is influenced by inflationary processes, the decrease in the efficiency of stock markets and the growth of interest rates.

It was recently revealed that US inflation rose to 9.1% a year last month, the highest in 40 years, which would mean the US central bank is tightening its monetary policy with a sharp increase interest rateswhich, in turn, will lead to an increase in the price of the dollar against other currencies.

Another negative global factor that Peru could face will be lower economic growth in China, as the Asian nation was announced to have fallen 2.6% in the second quarter due to COVID-19 lockdowns. According to the Peruvian Institute of Economics (IPE), Peru loses 0.4% for every 1% that does not grow in China.

Why do you believe that Peru will continue to grow?

The head of the IEF assured that the forecasts that executive branch indicate that Peru “will be one of the countries that will lead the development of the region.”

Graham argues that the country is currently in an “economic recovery process” that is not only a statistical recovery but also a result of the dynamism of the non-commodity sectors.

It is shown that during the first four months of the year Peruvian economy Its economic growth is 3.8%, and this figure could be higher if not for the shutdowns of the mining companies Las Bambas and Cuajone.

At the moment, the minister emphasizes that the unlocking of “major projects” of infrastructure and mining has already been achieved, which will save private investment at historical levels recorded in 2021.

One project expected to progress is the Quellaveco mine in Moquegua, which already reached its first copper concentrate production in July and plans to begin commercial operation in the second half of this year.

This project includes investments in the amount of 5.3 billion US dollars, which will be 0.4% of GDP in 2022 and about 1% next year.

In addition, the head of the MEF also indicated that a bill has been proposed that proposes a gradual reduction in the budget deficit and public debt.