MEF Expects 3.3% GDP Growth Despite Kurt Burneo’s Negative Forecast

The Ministry of Economy and Finance will present the Multi-Year Macroeconomic Framework (MMF) today, which outlines the performance and outlook for the country’s economy based on gross domestic product growth.

These growth forecasts already warn of a correction to the 3.6% forecast in April to 3.3%. As far as we remember, the same MEF chief Kurt Burneo warned of a decline in GDP growth from 3.6% to 2.2% a few days after taking office.

Although there is a big difference in forecasts of a minister with the same portfolio, we must warn what Burneo said last week about a possible recession in the country, which meant a fall in national production; despite the fact that economic experts rule it out and only warn of a slowdown.

Social conflicts spawned an economic downturn

“The GDP growth forecast for 2022 has been revised down due to temporary supply shocks that affected the growth of the primary sectors in the first half of the year due to social conflicts and a less favorable external environment.”

As we remember, a few days ago, the ombudsman’s office reported on 208 social conflicts throughout the country, most of them caused by mining and hydrocarbons. It is worth noting that for the first item in the first semester there was a decrease in its production due to the paralysis of large mines, such as Las Bambas.

Though the terrain is unfavorable due to conflict, The MEF believes that “the resilience of non-primary sectors” will overcome everything.

Forecasts for 2023 in Peru

Forecasts for 2023 are similar as MEF estimates 3.5% GDP growth driven by mining; In addition, the normalization of economic activity, which still cannot recover from the blow dealt by the pandemic caused by the new coronavirus.

There appears to be a good recovery in domestic demand in the context of lower inflationary pressures and the implementation of measures that will boost private and public spending.

There is also a difference with prediction Central Reserve Bank which calculated growth of 3.1%, according to its report published in June, and in 2023 growth of 3.2%.