On August 15th, the National Institute of Statistics and Informatics (INEI) revealed something that many analysts did not expect: the economy Peruvian unemployment only grew 0.21% in June (it accumulated an increase of 2.49% in the first half of 2024). Projections pointed to a 1% advance in the sixth month -which was already low-; however, neither access to the CTS nor the retreat to the AFP They managed to further boost productive activity.
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It should be noted that a report by the Central Reserve Bankpublished in September last year, revealed that Peru has 30 days of vacation and 16 holidaysmaking it the country with the most paid days off compared to other economies in the Organisation for Economic Co-operation and Development (OECD) and the Pacific Alliance.
In this sense, for the director of Phase Consultores, Juan Carlos Odar, a factor that impacted the June result was the non-working day for June 7 (Flag Day), which only began to take effect in 2024. For this reason, he considered that special attention should be paid to what happened in July, in which there were three holidays, of which one only appeared in 2023 to commemorate the Day of the Peruvian Air Force (July 23).
“The 23rd was new and isolated, a good example of how these non-working days should not be implemented. A new holiday generates a negative impact on the production of the month,” he commented.
There are several activities affected by these decisions, but the hardest hit, according to the economist, are construction and non-primary manufacturing because they stop operating completely or work on a very small scale.
Meanwhile, the Public Policy Manager of the Peruvian Institute of Economics (IPE), Víctor Fuentes, pointed out that the four holidays added this year mean up to 0.16 percentage points of lower growth in 2024. “In general, an excess of holidays can have negative impacts on economic activity,” he stressed.
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TOURISM
In recent years, four holidays have been added: June 7, July 23, August 6 and December 9. To these are added the non-working days for the public sector and the private ones that are accepted. One of the arguments for this decision is the boost to tourismwhich has not yet recovered from the pandemic.
In this regard, the president of the Institute of Economics and Business Development (Iedep) of the Lima Chamber of Commerce (CCL), Oscar Chávez, explained that the figures show that long holidays benefit tourism activities related to passenger transportation, lodging, restaurants, production and trade of crafts, travel agencies, and cultural and recreational services.
“Easter in 2023 took place in April and in 2024 it was celebrated in March. The highest growth rates of the sector occurred in those months, with growth of 9.1% and 5.6%, respectively,” he added.
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However, he recalled that the tourism sector barely represents 4% of the Gross Domestic Product (GDP) nationally, while others have a greater share and are affected by the days when the economy is paralyzed.
“Something similar happens when the holiday corresponds to the public sector and not the private sector. For example, certain operations of the financial system are suspended because a procedure or requirement that must be carried out in a public institution cannot be fulfilled,” he said.
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