The Peruvian Institute of Economics raises growth projection to 3% for 2024.

The Peruvian Institute of Economics (IPE) has updated its economic growth projections for Peru, raising the estimate of Gross Domestic Product (GDP) from 2.4% to a promising 3% for this year. This upward revision is based on a more favorable outlook for private spending, driven by various factors that have created a conducive environment for the country's economic development. According to the IPE, the outlook for 2024 has significantly improved due to more favorable external conditions, highlighting the rebound in mineral prices, the ongoing moderation of inflationary pressures, and an increase in confidence among both households and businesses. These factors have contributed to energizing the Peruvian economy, which was already showing signs of recovery with a growth of 1.4% in the first three months of the year. The GDP growth in the country has been remarkable, reaching an advance of 5.3% in a recent period, the highest recorded since September 2021. This increase has been driven by various sectors such as traditional agriculture, industrial fishing, non-primary manufacturing, construction, trade, and services. All these sectors have benefited from favorable conditions that have fostered greater dynamism in domestic demand. In this sense, the IPE highlights that economic growth has continued to rise in May, with key sectors such as agriculture and fishing continuing their positive trend after being affected by adverse weather conditions in the past. Likewise, it is expected that private spending will remain an important driver of the economy, with optimistic prospects for the second half of the year. One of the factors that has contributed to this improvement in economic projections is the release of funds from Pension Fund Administrators (AFP) and Severance Pay (CTS), which will inject additional liquidity into households and boost consumption in the coming months. This favorable scenario has led the IPE to consider that risks are tilted to the upside, given the possibility of further impetus in private spending. Despite the good prospects for the current year, the IPE points out that there are certain risks to consider, especially looking ahead to 2025, which is a pre-election year in the country. This condition could generate uncertainty among consumers and impact private spending behavior, so it is important to closely monitor the evolution of the economy and decisions that may influence the investment and consumption climate. In summary, the positive signals emitted by the Peruvian Institute of Economics regarding the country's economic growth are encouraging and reflect an improvement in the national economic outlook. With a projected GDP on the rise for this year and favorable conditions supporting the expansion of private spending, a promising horizon is envisioned for the Peruvian economy in the coming months. However, prudence and vigilance over possible future risks will be key to maintaining this path of sustained growth.