Development | Political and economic challenges in Peru by the end of 2024 | mining | Comment

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The week starting tomorrow will be the last week of the first half of 2024. As six months have already passed, it is very clear to expect the week-end numbers. economy 2023 Peruvian one year after recession.

Unlike last year, when the Ministry of Economy and Finance forecast expansion rates every month, which turned out to be more optimistic, this time the revisions were minimal. Between December 2023 and today, 2024 GDP growth estimates have generally moved within a narrow range of approximately 2.5% to 3%. The latest projections from the Central Reserve Bank (BCR), published in its inflation report last Friday, are close to the upper end of those estimates: the issuing agency calculates growth of 3.1% for the year. Following the April GDP data (5.3% year-on-year expansion, above expectations), most specialist firms are also revising their forecasts slightly upwards.

So, the consensus is this year and next year economy National will grow About 3%. Institutions such as the International Monetary Fund are accustomed to making long-range forecasts, suggesting that this will be the rate in subsequent years.

By doing so, high prices of minerals – particularly copper – will squander Peru’s enormous opportunity to grow with the momentum that an undoubtedly recessionary environment would allow. economy Universal. BCR estimates that private investment will grow Only 2.4% this year; As a reference, it averaged double digits every year between 2005 and 2012 (except for 2009) when copper prices fell below what is recorded today. Peru is flooded with new capital to develop mining and other sectors, but this is not the case.

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The explanation is not difficult. Any serious measure indicates that Peru will lose competitiveness relative to the rest of the world. A month goes by without some global company identifying new weaknesses. This week, for example, the country fell eight places in the global competitiveness rankings of Centrum PUCP and Switzerland’s Institute for Management Development. This puts it at 63rd out of 67 economies, four places above last place, equaling its worst historical performance in 2022.

While this is true of the S&P agency and its downgrade of Peruvian credit rating, it draws attention to the slow erosion of macroeconomic strengths, the dysfunction of the political system and its consequences for national development. With the 2026 general elections in turmoil, it’s not hard to guess that many business owners are skeptical about continuing to invest and hire. As a result, Peruvian households are still far from reaching the actual spending levels they had before the pandemic, a situation that has not been repeated in most neighboring countries.

The administration and Congress cannot be simple privileged spectators of the process of degeneration economic. Laying the groundwork for achieving expansion rates above 4% starting next year must be an undeniable priority, even more so as poverty figures continue to rise. In fact, the underlying problem is that successive governments and Congress have been not only spectators but also actors in the downfall.

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