Peru is struggling to regain the fast growth that made its economy one of the star performers in emerging markets this century, according to the government.
(Bloomberg) — Peru is struggling to regain the fast growth that made its economy one of the star performers in emerging markets this century, according to the government.
“The economy’s capacity for growth has fallen in the past 12-13 years, and then came the pandemic which accentuated that trend,” Finance Minister Alex Contreras told reporters on Tuesday. “That’s the challenge we face, to reverse this.”
Contreras said that the ministry has slashed its growth forecast for 2023 to 1.1% from 2.5%. So far this year, the nation’s economy has contracted, due to disruptive social unrest and damage to fishing and agriculture caused by the El Nino weather pattern.
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That puts Peru’s economy on track for its worst year in two decades, excluding the Covid-19 pandemic and the global financial crisis. In the years before the pandemic, Peru was Latin America’s fastest-growing major economy.
The uncertainty generated by continual political crises have also weighed on the economy in recent years. Weak global growth is also hurting the commodities exporter, according to Contreras.
“It’s getting harder and harder to grow at high rates, especially when the world is growing at a low rate,” he said.
The Andean nation is a major exporter of copper and other metals, as well as agricultural produce such as avocados, grapes, blueberries and asparagus and fish.
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