Output would grow by 1,6% in 2023 and by 2,6% in 2024 in Peru, the decline in economic activity in the first quarter of the year and the deterioration of the forecast of the El Nino phenomenon, causes a downward revision of GDP growth -0,3 pp this year and -0,4 pp next، According to “BBVA Research.”
“BBVA Research” explained that global economic activity is expected to slow down in the coming quarters amid rising inflation and interest rates, and global output growth is expected to reach 2.9% in 2023, 0.2 percentage points more than our previous forecast for March, mostly due to positive incoming data.
“However, we expect the delayed impact of tightening monetary and credit conditions to have an even greater impact in 2024, as global GDP growth is now expected to reach 2.9%, 0.3 percentage points lower than our previous forecast”, “BBVA Research” said.
“On the fiscal front, we expect a deficit equivalent to 2,4% of GDP in 2023 and about 2,0% from then on, a trajectory that corresponds to the total public debt not far from 34% of GDP in 2023 and 2024 and closer to 36% in 2028”، “BBVA Research” added.
The local currency will decline in the second half of the year as the positive difference in the interest rate between PEN-USD decreases and with it the attractiveness of local currency assets.
Along with this, the moderation of global economic growth is likely to increase risk aversion.
And ”BBVA Research” predicted that there is expectation that the foreign exchange to end the year in the range of 3,70-3,80 soles per dollar.
”BBVA Research” noted that inflation will fall faster in the coming months as fundamental effects begin and some supply shocks fade. However, it should end 2023 above the central bank’s target, around 4% year-on-year.
