The purchasing power of Peruvians will return to pre-pandemic levels next year, driven by controlled inflation and a certain greater economic dynamismestimated the central manager of economic studies of the Central Reserve Bank of Peru (BCRP), Adrián Armas.
“There is a tendency towards recovery, which is what is important. What we are already seeing this year is that real income is growing again, in terms of 5% annually, according to the latest data from the formal employment payroll,” he told Gestión in the framework of the Inpreu roadshow that is taking place this week in New York.
This expected greater recovery of real wages to levels similar to those before 2020 It is based on a higher pace of economic activity and a decrease in inflation, he argued.
“Although it will depend a lot on the composition of that income, which was previously hit hard by food prices, But now it is recovering due to the evolution of prices (they are slowing down),” he stressed.
Inflation in Peru is almost in the middle of the target range of the issuing institute, standing at 2.03% in August.
And the Peruvian economy grew 2.5% in the first half of the yearwhile the Bcrp projects a rate of 3.1% for the entire year.
Grow more
Going forward, potential GDP – currently at less than 3% – can rise again with the reforms that are needed, including political ones, Armas said.
“We can aspire to grow more because Peru has the conditions, such as the current interest (in investing in infrastructure). Peru had (nominal) growth rates of 6% not long ago. We can get there,” he said.
The official even considered that the next government will have a greater chance of growing the economy at a faster pace, However, this will require a return to a normal situation of political stability, as before 2016, and for the new administration to introduce reforms to increase potential GDP.
“The good thing is that the macroeconomic fundamentals remain solid, which is very important, because when there are fiscal problems, or problems with the credibility of the currency, it is difficult,” he added.
Quinquenio is not lost
In this regard, he considered that the country can avoid a lost five-year period of great growth opportunities, a presumption of analysts who anticipate favorable metal prices although At the same time, the Ministry of Economy and Finance (MEF) projects that between 2023 and 2028 the country will only advance 3%, on average annually.
“That (the projection of the multiannual macroeconomic framework) remains to be seen, because beyond 2026 it will depend on how the reforms are made. and how effective it is to recover the pessimistic environment (which prevailed in companies until the beginning of this year). If that happens, we will see upward revisions in the growth of the economy,” he said.
Further mortgage rate cuts will depend on government bonds
Interest rates on loans are already falling as a result of the monetary policy of reducing the reference rate applied by the Central Bank of Peru since September of last year.
However, Armas considered that additional reductions in the cost of mortgage loans will depend on the evolution of the yield of the bonds issued by the Peruvian Government in national currency. “It will depend more on that variable than on monetary policy, since it is a long-term issue,” he said.
