Central Bank warns Peru’s economy is still mired in mining problems – AméricaEconomía

The director of economic studies at the Central Bank of Peru said that the Peruvian economy continues to be affected by the protests targeting copper mines, including MMG’s Las Pampas and Southern Copper Corp’s Cuajon.

“The (production) problems persist, affecting the development of mining GDP,” said Adrian Armas.

Peru is the world’s second largest copper producer, and mining is a major source of its tax revenue.

The country is facing a wave of protests from indigenous communities who accuse mining companies of not providing enough jobs and benefits to poor residents.

Las Bambas alone accounts for about 1% of GDP and 2% of global copper supply.

While Peru is losing tax revenue while copper prices are near record levels, Peru is also facing high inflation and pressure to support costs that have risen since the Russian invasion of Ukraine.

On Thursday, the central bank raised the benchmark interest rate to 4.5% from 4%, claiming inflationary pressures.

Armas said the bank expects inflation to start slowing down from July, hitting the 1%-3% target range in the second or third quarter of next year.

The state has already abolished most taxes on gasoline and basic foods, and provided vouchers for poor families to buy cooking gas.