Challenges and Hope: Peruvian economy closes 2023 with a contraction of 0.55%

After a complicated year full of obstacles, the Peruvian economy closed 2023 with a contraction of 0.55%, according to the National Institute of Statistics and Informatics (INEI). This figure represents the first significant setback in Gross Domestic Product (GDP) since 1998, except for the year 2020 marked by the COVID-19 pandemic. The sectors that most impacted this negative growth were manufacturing, construction, the financial sector, telecommunications, agriculture, and fishing, all of them showing negative numbers in their performance, according to the INEI. This scenario was affected by various factors such as social conflict, climatological phenomena, problems with the supply of fertilizers, and avian flu in the agricultural sector. However, the positive growth in mining partially offset the GDP decline, according to the Peruvian Institute of Economics (IPE). Without this subsector, the economy could have experienced an even greater contraction. The December 2023 closing revealed nine consecutive months of negative results, mainly reflecting the decline in manufacturing. This continuous decrease raises uncertainties about a possible economic rebound in the first quarter of 2024. Experts point out that the weak December figure could influence the growth in the first quarter of this year, requiring a solid performance to recover production levels from previous years. Despite optimistic growth projections close to 1.5%, caution is recommended given the uncertainty in the economic landscape. Meanwhile, sectors such as national industry and public investment could show signs of an incipient recovery, although their evolution in the coming months still needs to be observed. The reduction in informal employment and other positive economic indicators offer a glimmer of hope for the Peruvian economy amidst a challenging context. In summary, although challenges and doubts about short-term economic recovery persist, there are signs of potential improvement that could set the course for the national economy in the first quarter of 2024.