Flooding from the passage of Cyclone Yaku in Chiclayo, Peru Aldair Mejia (AP)
The latest report from Peru’s National Institute of Statistics and Informatics (INEI) has confirmed fears that have persisted after three months of nationwide protests against Dina Boluarte’s government. Gross domestic product (GDP) fell 1.12% in January after 22 months of steady growth. Last week, Central Reserve Bank (BCR) President Julio Velarde had already forecast a 1.4% decline at a mining meeting in Canada, despite months of negative growth at the start of the year.
It was inevitable that the blocking of roads, the closing of markets, the clashes between law enforcement and protesters, and the obstruction of the free movement of people and goods would have an immediate and significant impact on the Peruvian economy. The sectors most affected are mining and hydrocarbons, construction, transport, finance and telecommunications. Most affected is the construction sector, which shows a negative change of 11.7% due to lower cement consumption (-15.12%) due to the reduction of real estate and self-construction projects, as well as the cancellation of orders and interruption of the working day in some plants.
Mining and hydrocarbons follow on the list, according to the INEI report. The sector, which contributes about 10% to GDP, fell by 3.61%. The reason: low production volumes of tin (-62.5%), silver (-19.9%), molybdenum (-12.4%), zinc (-6.9%), gold (-6.8%) , lead (-6.7%) and copper (-1.6%). Added to this is a lower exploitation of crude oil (-16.7%) and natural gas liquids (-3.3%). A decrease of 9.26% was recorded in the telecommunications and other information services sector.
The decline in finance and insurance has sounded the alarm: “It shrank by 5.95% due to lower lending (-5.6%) and deposits (-6.5%) from several banks. There was a downward trend in corporate, large, medium, small and micro business loans (-11.4%) and mortgage loans for housing (-0.9%). Transport, storage and messaging saw a 2.94% drop. “Social conflicts had a negative impact on land transport (-3.1%) due to less passenger and freight traffic on rail (-40.9%), and road transport (-3.0%) due to less freight traffic ( -8.5%),” the document reads.
The horizon doesn’t look encouraging either, due to the floods that various regions of Peru have suffered. The Lima Chamber of Commerce’s Institute of Economics and Business Development (IEDEP) has warned that should an El Niño phenomenon hit the coast in the coming months, five regions, accounting for 16.7% of GDP, would be affected. These are Tumbes, Piura, Lambayeque, La Libertad and Ancash. “Which would cause a reduction in the growth rate of our economy by up to 0.4 percentage points in 2023,” they argue.
Follow all international information on Facebook and Twitteror in our weekly newsletter.
Subscribe to EL PAÍS to follow all the news and read without limits.
subscribe to