In recent days, both the president of the Council of Ministers, Alberto Otárola, and the Minister of Economy and Finance, Alex Contreras, have been affirming that the Peruvian economy is in a frank process of recovery, a scenario totally removed from reality.
“The economy minister lives in the land of Barbie,” Congressman Carlos Anderson told local radio.
Peru’s economy declined by 1% in June, and it is headed to record its second quarter in the red, meaning that it will enter a “technical recession.”
First Quarter
According to official figures from the National Institute of Statistics and Informatics, the Peruvian economy fell 1.0% in January, 0.5% in February, and broke the trend in March with a small expansion of 0.2%. With these records, in the first quarter of the year, the gross domestic product (GDP) of the country contracted by 0.4%.
At the end of summer, the head of the Ministry of Economy and Finance (MEF) assured that the fall in the first quarter was due to social conflict and the Yaku cyclone and that without these factors, the economy would rebound in the coming quarters. In that sense, he projected to some journalists that in the following months, the GDP could grow at rates greater than 4%. But what was projected did not happen.
In April, the Peruvian economy grew just 0.3%, and in May, economic activity fell 1.4%. For June, Contreras Miranda himself predicted that GDP would fall 1.0%, and in July, national production would only increase 1%.
However, despite the mediocre results achieved in the last two quarters, the minister remains absorbed in his bubble and refuses to accept that Peru is in recession.
Recession
For renowned Peruvian economists, the figures do not lie, and our economy is in recession.
“The minister is obviously concerned about conveying optimism, but we have to be realistic. Technically, if an economy registers two negative quarters, it enters recession,” said the former Minister of Economy and Finance, Ismael Benavides.
“Peru is heading for two quarters of decline, which will show that it has entered recession. I don’t understand how you can say there is no recession when the numbers are clear. “This is not an opinion but a measurement, and there is no other way,” he said.
The economist and congressman of the Republic, Carlos Anderson, emphasized that there is no room for debate because, with two quarters in decline, you enter into recession. He commented that what Minister Contreras seeks is to rely on other forms of measurement to deny and not recognize that our economy is in recession.
“In countries in Latin America, growth is seen from quarter to quarter. What was produced in the first quarter is compared with the previous quarter. But, in the Anglo-Saxon world, where I have worked, the comparison is not like that, because it is about capturing what is called seasonality, so the most appropriate way is to compare the first quarter of 2023 with the first quarter of 2022, and in that comparison, we are in a technical recession,” he remarked.
