Peru Economy Likely to Have Exceeded Pre-Pandemic Levels -Cenbank

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Peru's economy is expected to have stayed above pre-pandemic levels in December and January, due to the recovery of internal demand and a record in exports, despite lower mining output after recurring social conflicts, the central bank said Friday, Reuters reported. "The economy is recovering, the output gap is closing, but it would still be below its potential," said Adrián Armas, manager of economic studies at the Central Bank, citing the bank's December and January advance indicator reports. Peru's economy has consistently exceeded monthly pre-pandemic levels since June 2021, according to central bank data. Business expectations about the local economy remain pessimistic, however, amid political uncertainty triggered by the administration of leftist President Pedro Castillo, who just named his fourth Cabinet in six months in office. Armas said there was the possibility of a deterioration in political stability, but that "the bank, as it has already done, has a high response capacity to deal with this situation." The bank also expects that Peruvian inflation, which registered its highest annual rate in 13 years last year, will begin to slow down from July and fall to within the target range of between 1% and 3% in the fourth quarter of 2022, Armas said. Read more.