Protests in Peru already leave losses of more than 555 million dollars: government

The protests in Peru do not detract from the optimism of the Minister of Economy and Finance, Álex Contreras, about the performance of the economy this year, since he maintains his estimate of growth greater than 3% in 2023 (range between 3.1% and 3.9 percent). hundred).

However, in the MEF there is concern about the impact that the social upheaval has been having on the economy, especially on production.

It is estimated that, so far, the losses for the Gross Domestic Product (GDP) total S/2,150 million (555 million dollars), of which S/1,000 million (258 million dollars) occurred in the month of December last year and another S/ 1,150 million (296 million dollars) so far in January.

The losses are basically in GDP, in economic activity, in production that was not generated either due to the loss of products or the closure of services or businesses,” Contreras said at a press conference.

The MEF calculation does not include damage to infrastructure caused by the violence of the protests, such as police stations, offices of the Public Ministry and the Judiciary, private financial entities and other businesses. “That reconstruction is going to have a cost and they are going to add to the losses,” he said.

In the midst of this situation, the MEF is handling two scenarios for the growth of the economy in the first quarter. The first is with a continuation of the protests, in which the GDP would grow 2%, while the second is with the solution to the conflict in which growth would be “at least” 3 percent.

Only in December, sales of formal businesses fell by S/16.5 billion (4.26 billion dollars) due to the protests, according to data from the National Superintendency of Customs and Tax Administration (Sunat).

The mobilizations have so far left 46 dead, including a policeman, after six weeks of political and social crisis marked by roadblocks and protests in different parts of the country.

optimistic projection

Although the ministry’s worst-case projection shows something of a stagnant growth in the first quarter, the 2% rate would be difficult to meet.

For example, BBVA Research, before the coup and the outbreak of violence in the country, already estimated that growth between January and March of this year would be only 2.3%. Now, with the protests, the scenario to meet the estimate is complicated.

“This scenario that has occurred after the coup d’état has even raised political tensions above what we anticipated in the risk scenario. It is probable that in the first quarter we will not reach the 2.3% we had planned and rather it will be less than 2%”, explained the chief economist of the aforementioned entity, Hugo Perea.