Economic challenges in Peruvian households: Adjustments and austerity in the face of inflation

The beginning of the year 2024 has brought new challenges for Peruvian households, who are facing an economic landscape marked by inflation and a decline in the national Gross Domestic Product (GDP). In light of this situation, the majority of families in the country have found themselves needing to adjust their expenses and reorganize their budgets to cope with the economic difficulties. According to the study on Expectations, Trends, and Changes in Household Consumption conducted by Ipsos Peru, 40% of Peruvian households state that their incomes are not sufficient to cover all their monthly expenses. Faced with this reality, 18% have had to dip into their savings, and 17% have resorted to loans to weather the economic crisis affecting the country. Javier Álvarez, Senior Director of Trends at Ipsos Peru, highlights the concern among Peruvian families over the loss of purchasing power, leading 90% of households to make adjustments to their expenses. Among the measures taken are the postponement of non-essential plans, adopting stricter habits to save on food, electricity, and water, as well as reducing spending on entertainment and personal care. On the other hand, economics professor Jorge Gonzalez Izquierdo pointed out that food inflation and recession have negatively impacted Peruvians' incomes, prompting a shift in families' consumption patterns to align with the current economic reality. This adjustment is reflected in the decreased purchase of certain products and services, particularly in food, household items, and personal care. The study also reveals that Peruvians' expectations regarding the future economic situation are divided, with a significant percentage opting to adapt their shopping habits to spend less at home in the event of a price increase scenario. Likewise, in the event of an economic improvement, some families plan to return to their previous shopping habits, while others will continue prioritizing savings and prudence in their expenses. In conclusion, the current economic reality has led Peruvian households to adopt austerity measures and adjust their budgets to tackle inflation and economic uncertainty. Adaptability and the search for alternatives to maximize their resources have become fundamental strategies for many families in the midst of this challenging context.