Protests remove a point from Peru’s GDP

The Minister of Economy and Finance (MEF) of the Republic of Peru, Alex Contreras, said that the protests in the country generated total losses of 1,000 million soles (about 260 million dollars), which represents a reduction of one percentage point in the Gross Domestic Product (GDP) for December.

“We have made the calculation and, in terms of GDP economic activity, it is around 1,000 million soles in total, that is our latest estimate with an average of 100 million per day (around 26 million dollars). There are some days that the stoppage had more impact than others. This does not consider the damage to infrastructure,” the minister said during the presentation of the “Con Punche Perú” plan.

The executive explained that the stoppages caused sales through electronic payment vouchers to decline. If holidays are excluded, as of December 26, average daily sales totaled 4,660 million soles, below the 4,989 million soles of 2021.

He added that the biggest challenge is to reverse expectations and restore social order. “Who wins with the strikes? Nobody, the workers, the micro and small companies lose (…) Of the 1,000 million soles in losses, between 70% and 80% occurred between the regions, ”he said.

The head of the MEF also mentioned that the social upheaval had an impact on food prices in recent weeks.

“We have seen that there was also an impact, happily moderate, as in the price of tomatoes and potatoes they had a hiccup, but this has been corrected as the supply has also normalized,” he said.

Along these lines, Contreras pointed out that weekly inflation during this period went from 8.1% to 8.3%. “There has been an impact, but it has been moderate,” he said.

Regarding the announcements to resume the strike at the national level for January 4, 2023, the official said: “The strikes do not benefit anyone, we all suffer. There are many ministers who are in Puno, Cusco, Apurímac, in the areas of conflict and are working to re-establish dialogue. Peru could not bear more losses”.

However, he stressed that next year the Peruvian economy would grow between 3.1% and 3.9%, according to the projections of the Ministry of Economy and Finance (MEF).