[News] BCR projects that the Peruvian economy will contract 12.5% due to COVID-19

[Dr.Drako]

The Central Reserve Bank (BCR) predicts that the sectors hardest hit by the state of emergency will be manufacturing, construction and commerce.


 

The Central Reserve Bank (BCR) significantly reduced the growth estimate of the Peruvian economy for this year, due to the paralysis caused by the state of emergency in the country due to the wave of contagion from Covid-19.

The issuing entity estimates that the country's GDP will contract 12.5% in 2020, a projection that contrasts with the 3.8% they expected in December last year, before the new coronavirus spread around the world.
 

The BCR's projection is even slightly higher than the World Bank estimate, which predicted that the Peruvian economy would contract 12% in 2020, the deepest drop in Latin America.
 

Among the sectors hardest hit by the economic downturn, the BCR predicts that key activities such as manufacturing, construction and trade will show declines this year that will exceed 20%, which already has a direct impact on employment.




 

In detail, non-primary manufacturing, intensive in hiring personnel, would suffer a 23.8% drop this year, according to the BCR. While the construction sector would collapse 25.4% and trade would drop to 23.6%.
 

Meanwhile, among primary activities, the key mining sector, one of the main engines of the country's economy, would experience a contraction of 10.2%, while the hydrocarbon sector would face a 14.4% reduction in 2020.
 

Among the few sectors that would show positive results in 2020 are fishing (9.5%), agriculture (1.3%) and primary manufacturing (2.1%), mainly linked to the production of fishmeal.
 

However, the BCR expects the Peruvian economy to show a strong recovery in 2021 and projects that GDP will rebound with growth of 11.5%, an estimate higher than the 3.8% they expected in December 2019. Although the outlook is still quite clear uncertain in the coming months.