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Peru economy likely to have exceeded pre-pandemic levels -cenbank -Breaking

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© Reuters. FILE PHOTO – A man passes the Central Reserve Bank of Peru (BCRP), inside a downtown Lima building, on April 7, 2015. REUTERS/Mariana Bazo

LIMA (Reuters – Peru’s economy will likely have remained above pre-pandemic levels during December and January due to the recovery in internal demand and record exports despite lower mine output following recurring social conflict, said the central bank Friday.

“The economy is recovering, the output gap is closing, but it would still be below its potential,” Adrián Armas, manager of economic studies at the Central Bank, told a news

Conference, citing bank’s Jan and Dec advance indicator reports.

Central bank data show that Peru has outperformed its monthly pre-pandemic levels every month since June 2021.

However, business expectations regarding the local economy are still low due to political uncertainty created by President Pedro Castillo’s leftist administration. Castillo just appointed his fourth Cabinet after six months of office.

Armas stated that there were possible deteriorations in the political stability but that “the Bank, as it already has, has a high capacity for responding to this situation.”

Armas stated that Peruvian inflation will also slow down, having reached its highest level in 13 years in July. It is expected to fall back to the goal range of 1% to 3% by the end of the fourth quarter 2022.

According to the official, there had been a revival in services production, electricity production, agricultural product exports, formal employment growth, as well.

Peru’s 2021 exports should reach $63 billion, due to the high metal prices. That amount represents 28.1% of Peru’s gross domestic product.

“The Peruvian economic environment remains highly favorable,” he said.

Peru is second in the world for producing. Due to conflicts with the local community, some large mining operations in Peru have had to slow down their production.

Peru’s population has been vaccinated for over 80%, which has contributed to the country’s economic strength.

Armas reported that “people are beginning to go out more confidently.”

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