Peru’s apex bank reduces growth projections

The central bank of Peru revised down its projections for economic growth in 2022 and 2023 on Friday due to weakening expectations despite a package of government stimulus measures meant to increase domestic production.

The central bank has increased its projections for growth to 3.0% in 2022 from 3.1% before and to 3.0% in 2023 from 3.2% previously. Additionally, it forecasted an increase in annual inflation to 7.8% this year and 3.0% in 2023.

This comes after Kurt Burneo, the finance minister, last week unveiled a package of economic measures intended to boost the economy amid a worldwide slowdown and declining copper prices, which are vital to the nation’s economy.

Burneo had earlier in September predicted that Peru might benefit from the stimulus plan and experience 3.9% economic growth in 2022, rising to 4.3% in 2023, even though several of its provisions are still pending congressional approval.

“There are no magic wands”, central bank chief Julio Velarde told a press conference, saying the bank was still examining the impacts of the government’s stimulus measures.

According to Velarde, the bank is maintaining its fiscal deficit prediction for 2022 at 1.9% of GDP and 1.8% for the following year. Following the completion of Anglo American’s Quellaveco copper project in the south of the country, Velarde predicted that investment in Peru’s important mining sector will fall by 3.7% in 2022 and by 16.2% in 2023. The second-largest copper producer in the world, Peru exports almost 60% of all its exports, which are made up of other industries.

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