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Economy & Business - May 2021

ECONOMIC HIGHLIGHTS

PERU | Gov’t predicts strong economic recovery. On 30 April Peru’s economy & finance minister, Waldo Mendoza, said the government predicts a strong recovery in 2021-2024 after a tumultuous year saw GDP fall by 11.1% in 2020 due to the coronavirus (Covid-19) pandemic. Mendoza said that GDP is expected to grow by 10% in 2021, which would be the largest annual increase since 1994, as a result of resumed economic activity following last year’s lockdowns. The minister predicted that the year-on-year growth rate will then stabilise at 4.5% for the 2022-2024 period, which Mendoza said would be sustained by internal demand, increasing copper exports, and the recovery of external demand. He also said that investment would increase in this period as construction continues on several key infrastructure projects, including a subterranean line of the Lima metro and the extension of Lima's ‘Jorge Chávez’ international airport. Mendoza also forecast a fiscal deficit of 5.4% of GDP in 2021, with public debt sitting at 35.8% of GDP.

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