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Peru raises the GDP projection for 2021 to 11.9% but drops to 3.4% that of 2022

Lima, Sep 17 (EFE) .- The Central Reserve Bank of Peru (BCRP) raised the projection of growth of the Peruvian economy for 2021 from 10.7% to 11.9%, but corrected down the expectations for the next year, they went from 4.5% to 3.4%.

During a virtual conference on the inflation report, the president of the BCRP, Julio Velarde, said that the upward revision of the Peruvian gross domestic product (GDP) for 2021 responds to the good economic performance that the country has been registering, after the collapse of the 11 , 12% that it suffered in 2020, when it interrupted 22 consecutive years of growth.

This new projection of 11.9% optimistically exceeds the estimate of 10.5% recently provided by the Ministry of Economy in its multi-year macroeconomic framework.

However, projections worsened for 2022, a period in which the BCRP expects the country’s economy to advance only 3.4% due to the “weakening of business expectations”, weighed down by the uncertainty generated by the arrival of the leftist Pedro Castillo to the armchair presidential.

For this same reason, Velarde pointed out that private investment would not grow in 2022, which represents a deterioration in the projection of this indicator, which last June stood at 2.5%.

RECOVERY IN 2022

The head of the bank specified that he expects the Peruvian economy to reach its level prior to the coronavirus pandemic in the first quarter of next year, although it could even do so by the end of 2021 if it continues to advance at a good pace.

Likewise, the BCRP estimates that the fiscal deficit will continue its downward trend and will stand at 4.5% of GDP this year and 3.4% in 2022 due to higher tax revenues and the consolidation of non-financial expenses.

In relation to public debt, it is expected that it will not exceed 35% of GDP this year and the next.

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