Peruvian Economy | FEM | The big surprise is the fast-moving tech recession Alex Contreras | GDP | David Dusta | Alonso Segura | economy

The Andean nation’s economy shrank 0.5% in the first five months of the year, impressing economists and challenging the government’s stance.Peru is back” after a period of intense political turmoil.

“Beyond the concept of technological stagnation, the government needs to start realizing that we are not coming back, we are in the same direction, it is downwards.Said David Tuesta, a former economy minister who is now president of the Competitiveness Private Council, a local think tank.

read more: Waldo Mendoza: “1% growth is a problem, but it’s no reason not to improve”

Economists said it was almost impossible to reverse the current trend next month, confirming a technical recession, usually defined as two quarters of negative growth.

At the heart of Peru’s extraordinary problems are two factors: political problems that have dragged on for years have finally caught up with its economy; And the El Niño weather event has crippled its vital fisheries. That doesn’t bode well for President Tina Polwart, who faces the lowest approval rating in seven months in office.

Peru came out Great Depression and soon recovered International distribution. Excluding those two global events, Peru recorded a one-month contraction between 2008 and 2022. It has already posted three months of contractions this year.

read more: The industry has gone to the highest level in the last eight months and the reasons behind this

Years of political crises have marred the country’s success story. Six presidents have served in seven years. His last presidential transition was the most traumatic since former President Pedro Castillo was impeached and arrested for attempting to illegally dissolve Congress. Presidency Poluiarte Thousands of Peruvians boycotted the economy with roadblocks demanding his resignation.

Poluiarte It remains in power, but clashes with law enforcement have claimed nearly 50 civilian lives.

This weak economy comes at a time when the most vulnerable Peruvians are already suffering. Poverty levels have risen, and there are now 1 million more poor Peruvians than there were a decade ago.

“This is a strong truth shock“, said Andrea Casaverde, UBS Economist for Andean Countries. “This indeed confirms that it is very difficult to achieve the projections of the Ministry of Economy and the Central Bank”.

The Economy Ministry and Peru’s Central Bank forecast growth of 2.5% and 2.2% respectively this year. The economy ministry declined to comment for this story, but portfolio minister Alex Contreras said he would speak on the economic situation Monday morning. In the past, Contreras has mistakenly said the economy is recovering.

Economists do not see the tech slowdown continuing for long, and Peru should experience little economic growth this year.

Helping to sustain the economy is Peru’s strong mining sector. Anglo American plc opened the US$5 billion Guellawego mine late last year, adding significantly more copper production than a year ago.

“You have that statistical effect that doesn’t make the economy look bad.”, said Alonso Segura, former Minister of Economy and professor at the Pontifical Catholic University of Peru. “The economy is very weak”.