Julio Velarde - Photographer: Samuel Corum/Bloomberg
LIMA: Peru’s central bank has cut its forecast for positive economic growth this year, now forecasting the economy of the world’s No. 2 copper producer will shrink for the first time since 1998, barring the coronavirus pandemic.
Shortly after official data marked October as the sixth consecutive month of economic contraction, the bank said gross domestic product (GDP) should fall 0.5% this year, compared with a prior forecast of 0.9% growth.
Central bank president Julio Velarde told reporters the economy suffered from a fall in copper prices, slowdown in China and lingering impacts of early 2023 social protests, though “the most important has been the climatic factor”.
Velarde estimated that climate issues –aggravated by the El Nino weather phenomenon which warms the Pacific Ocean, spurring extreme weather – shaved off 1.5% of GDP, largely in agriculture, while anti-government protests had a 0.8% impact.
Barring 2020 when pandemic shutdowns drove GDP down 11%, this would be Peru’s first economic contraction since a 0.4% decline in 1998. The bank cut its 2024 mining industry growth forecast to 2%, from a previously estimated 2.4%. — Reuters
