Peru’s central bank on the weekend lowered its economic growth estimates for 2022 and 2023, amid worsening expectations despite a package of government stimulus measures aimed at boosting local production.

The central bank now expects 2022 growth of 3.0 per cent, compared with 3.1 per cent previously and 2023 growth of 3.0 per cent, compared with 3.2 per cent previously. It also predicted that annual inflation would rise to 7.8 per cent this year and 3.0 per cent in 2023.

This comes after Finance Minister Kurt Burneo last week launched an economic package aimed at lifting the economy during this current global slowdown and falling copper prices, which are key to the country’s economy. Burneo had earlier in September declared that Peru could achieve economic growth of 3.9 per cent in 2022, rising to 4.3 per cent in 2023, thanks to the stimulus package.

Interestingly, many of the stimulus measures are still awaiting approval from Congress.

Peru’s Central Bank President Julio Velarde said the bank is maintaining its 2022 fiscal deficit projection at 1.9 per cent of gross domestic product (GDP) and 1.8 per cent of GDP next year.

Regarding Peru’s key mining sector, Velarde noted that investment should decline by 3.7 per cent in 2022 and in 2023 with this decline deepening to 16.2 per cent, following the completion of Anglo American’s Quellaveco copper project in the south of the country. Peru is the world’s second-largest copper producer and its mining exports total around 60 per cent of the South American country’s overall exports.