According to this organization, the PPI In Peru, for the second year in a row since the pandemic, growth will be just 1.3% above the regional average. In 2022, the local economy grew by 2.7% and ended 18 years (excluding 2020) of higher growth than the rest of the continent.
Inflation rates will continue to decline at the end of the year in most countries, but not within the limits allowed by central banks. The exceptions to this trend are Argentina and Venezuela, which reached annual inflation rates of 124% and 398% in August, respectively, among the four highest in the world.
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What awaits local and regional economic activity? Luis Miguel Castilla, former Minister of Economy and executive director of the Videnza Instituto, points out that the local growth consensus for this year is less than 1%, and that it will rise to 3% in 2024. An El Nino event, political upheaval or failure to improve the business environment. Likewise, it highlights that the slowdown has extended not only to primary sectors but also to key components of domestic demand such as private consumption.
“It is not just the primary sectors that are falling [agro, pesca], domestic demand has also contracted significantly. Manufacturing, construction, services, almost the entire economy. The exception is mining. Without Quellaveco, the economy would have closed in the negative this year”Explain.
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Castilla says the region’s growth plan has grown due to better performance in Brazil and Mexico, while Argentina will need stronger fiscal adjustment to reduce its inflation. “Inflation will be difficult to reduce in Argentina, which has the highest levels along with Venezuela, as it implies fiscal adjustment and attempts to renegotiate new terms with the International Monetary Fund. Argentina is a major creditor to the International Monetary Fund. Whichever candidate wins, a very strong conventional stabilization policy is coming, which is the country’s Unless they can make the necessary changes to slow growth and keep inflation low or maintained.It is needed.