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Peru central bank lowers growth forecasts despite government stimulus

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LIMA — Peru’s central bank on Friday lowered its economic growth estimates for 2022 and 2023, amid worsening expectations despite a package of government stimulus measures aimed at boosting local production.

The central bank now expects 2022 growth of 3.0%, compared with 3.1% previously, and 2023 growth of 3.0%, compared with 3.2% previously. It also predicted that annual inflation would rise to 7.8% this year and 3.0% in 2023.

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This comes after Finance Minister Kurt Burneo last week launched an economic package aimed at lifting the economy at times of a global slowdown and falling copper prices, which are key to the country’s economy.

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Burneo had earlier in September said Peru could achieve economic growth of 3.9% in 2022, rising to 4.3% in 2023, thanks to the stimulus package, although many of its measures are still awaiting approval from Congress.

“There are no magic wands,” central bank chief Julio Velarde told a press conference, saying the bank was still examining the impacts of the government’s stimulus measures.

Velarde said the bank was maintaining its 2022 fiscal deficit projection at 1.9% of gross domestic product (GDP) and at 1.8% of GDP next year.

Regarding Peru’s key mining sector, Velarde said investment should decline by 3.7% in 2022 and in 2023 this decline should deepen to 16.2%, following the completion of Anglo American’s Quellaveco copper project in the south of the country.

Peru is the world’s second largest copper producer and its mining exports total around 60% of the South American country’s overall exports. (Reporting by Marco Aquino; Writing by Aida Pelaez-Fernandez; Editing by Sarah Morland, Mark Porter and Jonathan Oatis)


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