Kurt Borneo warns: ‘Peruvian economy is cooling down and may fall into recession’

Kurt Borneo, the new Economy Minister Photo: Presidency of the Republic

Minister of Economy Kurt Borneo, He argued in a column in the Gestión newspaper that The growth of economic activity for 2022 in Peru will be very low. “According to the official projections found upon taking office, GDP will only increase between 2.4% and 3.4%.”

burning He asserts that employment depends on the growth of economic activity and explains why this is happening and what the Ministry of Economy will do about it.

The Peruvian economy is gradually calming down and may even fall into recession Where decades of GDP and jobs are destroyed. Several recessive forces are working simultaneously to calm the Peruvian economy. The first force is external. The three engines of the global economy, the United States, Europe and China, are stalling for various reasons, as explained by the International Monetary Fund,” warns Kurt Borneo.

argued that Global interest rates on rising metal prices That we are exporting down “the formation of an adverse external scenario for a small economy such as that of Peru, closely linked to the global economy, in which exports decline and capital leaves.”

burning He also pointed out that The ‘particularly conflicted’ political situation It affects confidence and reduces private spending (especially investment) and that high inflation reduces the real income of workers (prices go up by elevator and fares by stairs)It also reduces household consumption.

file image.  Elena Rodríguez carries a list of products and money to shop for her soup kitchen as she works in Pamplona Alta, a low-income neighborhood on the outskirts of the Peruvian capital where high food prices make animal protein unattainable.  Citizens, in Lima, Peru, April 11, 2022. Photo taken April 11, 2022. REUTERS/Daniel Bisrel
file image. Elena Rodríguez carries a list of products and money to shop for her soup kitchen as she works in Pamplona Alta, a low-income neighborhood on the outskirts of the Peruvian capital where high food prices make animal protein unattainable. Citizens, in Lima, Peru, April 11, 2022. Photo taken April 11, 2022. REUTERS/Daniel Bisrel

He further emphasized that Central Reserve Bank of Peru “He has raised the interest rate on monetary policy since the middle of last year, making credit to the private sector more expensive and making it less abundant, so that the annual inflation rate returns from the current 8.8% to the target range between 3% and 1% per year.”

This combination of external and internal forces explains the current slowdown in economic activity and job creationIn addition to the real danger we face of falling into an open recession as GDP contracts and jobs are destroyed,” says the Minister of Economy.

Finally, he said, fiscal policy is needed to drive the economy and employment forward and to counteract this opposite context.

Read on

The Economy Minister, Kurt Borneo, has indicated that he will prioritize generating confidence so that the economy can grow
Congressman Jaime Quito points out that Kurt Borneo represents the continuity of neoliberal policies
Kurt Borneo suggests that the executive branch and Congress work “so that the economy is not affected by other factors.”

Leave a Reply

Your email address will not be published.