Peru’s central bank expects economy to grow 3.4% in 2022

LIMA, Dec 17 (Reuters) – Peru’s central bank said on Friday it was maintaining its expectation for the country’s economy to grow 3.4% in 2022, while revising its forecast for 2021, saying that the economy would grow by 13.2% rather than before. estimate of 11.9%.

Central Bank President Julio Velarde added at a press conference that he expects Peru’s budget deficit to fall to 3.1% of gross domestic product in 2021 and 2.8 % in 2022.

Peru’s tax revenues have increased significantly in 2021 compared to pre-pandemic levels due to high mineral prices, which has helped reduce the budget deficit. Peru is the world’s second largest producer of copper.

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But the mining sector is also experiencing turbulence, with one of Peru’s largest copper mines, MMG Ltd’s Las Bambas (1208.HK), set to suspend production on Saturday due to a roadblock imposed by a local community for jobs and economic contributions.

Las Bambas, Velarde said, represents 1.2% of Peru’s GDP.

“We’re looking at Las Bambas being suspended in this year’s estimates, but we’re also assuming that this issue will somehow be resolved next year and Las Bambas will continue to produce,” he said.

Velarded added that the bank expects inflation in 2022 to fall to 2.9%, at the upper end of Peru’s inflation target range of between 1% and 3%.

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Reporting by Marco Aquino

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