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February 28, 2023
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Ten regions at risk of falling into recession this year

Ten regions at risk of falling into recession this year

The economies of ten regions could experience a recession in 2023 as a result of the and stoppage of activities in recent months, according to an analysis by the Development Studies Network (Redes).

The regions that would be vulnerable to see a drop in their economy are Amazonas, Apurímac, Ayacucho, Cusco, Huancavelica, Ica, Madre de Dios, Piura, Puno and Tacna, since their gross product growth was already negative or close to zero in the third quarter of last year.

Some of these cases are Puno, with -0.6%, followed by Apurímac (-0.4%), Cusco (0.6%) and Madre de Dios (1%).

“This is mainly explained by the higher incidence of interruptions in economic activities, which generated greater shortages in markets in different cities of the country and the stoppage of sectors such as tourism, agro-export trade and mining,” said the Redes researcher, César Garcia.

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The situation is even more difficult for some regions if one takes into account that in the case of Apurímac, for example, the Las Bambas mine is paralyzed, which represents 78% of the GDP of that region. Something similar, although in a different proportion, can be observed in Cusco with the Constancia and Antapaccay mines.

All this, in addition, is accompanied by the lower expansion of the Peruvian economy, which in the fourth quarter grew only 1.7% compared to the same period in 2021, according to the researcher.

The outlook for 2023 at a general level is not auspicious either, because although the Ministry of Economy and Finance (MEF) and the Central Reserve Bank (BCR) forecast growth of 3% and 2.9%, respectively, projections for the financial sector and multilateral organizations are below, even forecasting an expansion of only 2.3% for the Peruvian economy by the International Monetary Fund (IMF).

Data:

-César García, a researcher at Redes, explained that if the social upheaval and political uncertainty continue, this could be detrimental to private investment.

-“In 2022 it fell 0.3%. This performance is worse than that estimated by the BCR and complicates the country’s growth,” he said.

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