Peruvian Institute of Economics: Private Investment to Grow in Two Months to 2024 | Peruvian Economy | Moody's | economy

Peruvian Institute of Economics (IPE) after accumulating a 0.6% decline in 2023, The Peruvian Economy It has shown signs of increased activity earlier this year.

In fact, economic activity reached 1.4% annual growth in January 2024.

The improvement in manufacturing was led by the recovery of sectors linked to domestic demand such as construction and trade and services. These commodities were hit hard during the high social conflicts recorded in early 2023, he pointed out.

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These positive results are also reflected in indicators linked to investment expenditure.

According to IPE estimates, the Private investment It would have accumulated a 5% advance in the first two months of the year, capping a cycle of six consecutive quarters of declines recorded since the end of 2022.

Public investment

A similar reading was recorded in the case of public investment, which accumulated a real annual growth of 70.6% as of February 2024, considering the implementation of high levels of work in subnational governments and the continued progress of programs related to climate emergency care. National Government.

In this context, the absence of severe climate shocks in the first months of 2024 has led to a significant improvement in the expectations indicators of companies and households, IPE notes.

For example, business expectations about the economy over 12 months collected by the Central Reserve Bank of Peru (BCRP) They reached their highest level since March 2021 in February 2024, which would expect more activity in economic activity later in the year.

In response to this new macroeconomic panorama, the company has raised its economic growth forecast for 2024 from 1.9% to 2.4%.

According to IPE, the increase was mainly explained by higher-than-expected private spending in the first quarter. “As a result, private spending projections now point to a 2% expansion in 2024, compared to the 1.3% previously forecast,” I notice.

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Forecast to 2025

By 2025, the IPE In an environment of low interest rates and continued moderation of inflationary pressures, the Peruvian economy maintains its forecast to return to its potential growth rate of 2.8%.

The update was presented during a virtual seminar “Peruvian Economy: New Projections 2024-2025” organized by IPE, which included comments from Jaime Reusch, Vice President of the Sovereign Risk Group. Moody's; and the sobriety of Paola Villar, a journalist specializing in economics.

What does Moody's say?

During his speech, Reishe agreed with the high-energy predictions The Peruvian Economy In 2024, it will be favored by an improvement in private investment, mainly linked to the execution of new mining projects.

He also noted that the signals shown by the government regarding lifting the ban on projects in various sectors are important to further strengthen confidence in the private sector.