Tras el proceso de reapertura de actividades productivas y levantamiento de restricciones a la movilidad de las personas que se inició en mayo del año pasado, el PBI del Perú casi ha alcanzado su nivel precrisis. De hecho, estimamos que la economía se habría contraído “apenas” 2% en diciembre del 2020, con respecto al mismo mes del año anterior.
En diciembre el Indicca se ubicó en 43 puntos, cuatro puntos por encima del nivel del mes anterior. Si bien este resultado sugiere una mejora en las condiciones para consumir de las familias limeñas hacia el cierre del año, en realidad una buena parte del incremento se explica por el efecto estacional que siempre se da en fiestas navideñas.
La primera protesta social que tuvo que enfrentar el gobierno del presidente Sagasti ha sido protagonizada por trabajadores vinculados con la agroindustria de exportación, inicialmente centrada en la región Ica, que aporta la quinta parte de las exportaciones del sector agrícola no tradicional. Las demandas sociales se centraban en tres temas principales: (i) la eliminación de las services, (ii) el aumento de la remuneración diaria (de S/39,2 a S/70) con acceso a mayores beneficios y (iii) estabilidad laboral.
There’s an urgent need to implement an ambitious infrastructure program that has the political backing and support in order to overcome potential red tape obstacles. This is key to be able to guarantee the growth and development of Peru, especially of the regions further inland. The current legal framework does make this a possibility, but for many years now, what has been lacking is the true support from our authorities—at different levels—so initiatives aren’t abandoned. Likewise, it’s indispensable to recover investors’ trust in terms of the stability of contracts with the Government to encourage them to start making investments again. This is relevant in a macroeconomic context that has been hit by the COVID-19 crisis, where our fiscal and new debt capacities have become limited and consequently, so has our the margin to push large infrastructure projects that have been entirely financed with public funds (for example through PMOs or G2G).
On Thursday, August 6th, the second cabinet of ministers in less than a month was sworn in, after the Congress of the Republic gave a vote of no-confidence to the Cabinet presided by Cateriano. By doing so, a political crisis is added onto the health and economic crises, exacerbating governability risks even further. The new Council of Ministers, led by Walter Matos, has to present itself to obtain an acceptance vote within the next 30 days. Nevertheless, even if the new Cabinet gets the acceptance vote and the political crisis is overcome, this will not dissipate the country’s governability risks. The confrontation between the two powers of government are most likely to continue within a context where political rules favor the Parliament. Furthermore, this confrontation could damage certain relevant political and economic definitions, such as the regulatory proposals coming from Congress, the draft of the Public Budget Law and the definition of electoral rules for 2021.
After a severe drop in Q2 2020, global economic activity is recovering. This is explained by the relaxing of restrictions on operations in different parts of the world and by the strong injection of liquidity into the economy from central banks. Over the next few months, the world will continue to gradually recover its rate of production, and the renewed risk appetite from investors will remain high. As such, the search for higher profits will keep the interest rates on the Peruvian sovereign debt close to its historically low levels (as registered at the end of July), in line with low international interest rates. Nevertheless, the uncertainty on a local level–politically speaking, mainly–, will prevent the sol from increasing in value significantly. Consequently, the dollar is expected to stay at around 3,50 soles toward the end of the year.
The crisis generated by COVID-19 has drastically changed the business environment in Peru. It’s likely that economic activity will contract by 14% in 2020, the strongest fall in the last 100 years of Peruvian history. In Q3 and Q4 2020, the recovery will be gradual, since families and businesses will continue still be highly affected. Moreover, the environment will be dominated by a high level of uncertainty associated to the evolution of COVID-19, as well as the election process coming up in 2021 and a heightened regulatory risk. Moving forward, these are the risks that persists which could slow down the recovery in Q3 and Q4 2020: 1) a new outbreak of the coronavirus which could curb the process of economic reopening and, 2) the slow execution of public spending and pay outs of liquidity programs. This way, the new Cabinet faces the enormous challenge of reducing regulatory risk, managing the levels of confrontation between the Executive and Congress and attending to citizens’ demands in a timely manner.
PERU AT 200 YEARS OLD: THE NEED TO ESTABLISH ITS DIRECTION
Business challenges in a more complex world
After an unprecedented global crisis and on the eve of a general election, Peru is facing a difficult year with many challenges to overcome. APOYO Consultoría presented an agenda which will helped businesses understand the prospects of politics, economy and business opportunities for the next three years.
The event took place September 8, 9, 10, 15, 16 and 17, 2020.
