Economic recovery in Peru: regional disparities and pending challenges

After a year marked by recession and climate challenges, the Peruvian economy begins to show signs of recovery at the beginning of 2024, with a growth of 1.4% in national production during the month of January. However, this average hides disparities in the economic performance of the different regions of the country. Following a contraction of 0.4% in the last quarter of 2023, national production closed the year with a 0.6% decrease, impacting 11 regions that ended in negative territory. Lima was one of the most affected regions, with a 0.9% decrease in its production, caused by the fall in private spending, especially in investment. In contrast, the northern regions experienced a contraction of 1.5%, mainly due to the negative effects of climatic phenomena on the agricultural sector, which contracted by 8%. On the other hand, growth in mining in the south contributed to preventing a greater economic decline during 2023. The construction sector has led the economic recovery by recording a growth of 13.2% in January 2024, driven by the execution of public works, especially in the central regions. This increase in public investment has been key to energizing economic activity in these areas, offsetting the decrease in agricultural activity in some regions. For the remainder of the year, a greater dynamism in regional economies is expected, especially from the second semester onwards, as indicated by business activity indicators. Expectations are optimistic, especially in the northern part of the country, where a recovery is expected in sectors such as agriculture and fishing as the impacts of climatic phenomena dissipate. Despite these advances, it is important for authorities to focus on creating a conducive environment for private investment, addressing issues such as citizen insecurity and illegal economies at a national level. Only in this way will job creation be boosted and poverty significantly reduced in the country.