Peruvian banks: key drivers of economic growth and development in 2023

In the current economic context of Peru, banks have consolidated themselves as fundamental actors for both the economic and social development of the country. Their role is not limited to financial intermediation; it extends to income generation and job creation, aspects that are crucial for the well-being of the population. In 2023, the total credit growth, which increased by 12%, has been an essential vehicle for the expansion of companies across various sectors, which in turn has fostered an increase in national production. The projection of a 2.5% growth in Gross Domestic Product (GDP) for 2024 is a positive indicator, reflecting the collective efforts of the financial system and private investment. This growth would not be possible without the active participation of banking entities, which are constantly seeking opportunities to promote development. In fact, the financial and insurance sector represented 4.8% of GDP in 2022, highlighting the importance of these sectors in the country’s economic structure. The figures presented by the Peruvian financial system are encouraging. In the current year, a financial intermediation rate of 44% has been achieved, demonstrating the effectiveness of banks in mobilizing resources and channeling them to the areas that need them most. This indicator is key, as a high intermediation rate implies that a greater proportion of savings is being used to finance productive investments, leading to job creation and economic growth. Moreover, foreign direct investment has taken a leading role in this development. During 2022, this investment reached 6.2% of GDP, a result that is largely driven by the efforts of Peruvian banks. By facilitating the entry of international capital and offering financial services that allow foreign companies to operate confidently in the country, banks directly contribute to the diversification of the Peruvian economy. Peru's high dependence on cyclical sectors, such as mining, which accounts for 10% of GDP, poses significant challenges. However, the investments made by banks are helping to mitigate this economic vulnerability. By diversifying investments in emerging sectors, there is an effort to reduce the risk associated with commodity price fluctuations and create a more stable environment that favors sustained development. In fact, economic diversification is crucial for the future of Peru. Promoting sectors such as technology, sustainable agriculture, and tourism can open new opportunities for growth. Banks are at the center of this process, acting as facilitators of financing and advisory services, which in turn allows companies in these emerging sectors to grow and develop. It is important to mention that financial inclusion has also been a priority for banking entities in Peru. Initiatives to bring financial services closer to underprivileged sectors have allowed a larger portion of the population to access credit, savings, and insurance, which is essential for improving the quality of life for many citizens. This improvement in financial inclusion not only strengthens families but also creates a virtuous cycle that benefits the economy as a whole. As the world faces challenges such as economic volatility and the effects of climate change, the role of banks becomes even more relevant. Their ability to mitigate economic risks and offer innovative financial solutions will be key to ensuring that economic growth is inclusive and sustainable. Therefore, it is evident that banks in Peru are not just financial entities; they are true catalysts of economic and social progress. Through job creation, resource channeling, improvement of financial inclusion, and risk mitigation, their contribution to the country’s development is undeniable. The future of Peru will largely depend on the ability of these banks to adapt and evolve in an increasingly complex economic environment.