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LatinNews Daily - 12 November 2021

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In brief: Peru’s central bank says 2021 growth could exceed expectations

* The governor of Peru’s central bank (BCRP), Julio Velarde, has said that Peru’s economy could grow by 13.2% this year, up from the BCRP’s current forecast of 11.9%, if the current pace of economic expansion is maintained. Velarde said that Peru “is doing better than the six biggest countries in Europe in terms of recovery” from the coronavirus (Covid-19) pandemic, and said that in Latin America only Chile is outpacing Peru’s recovery. He attributed the strong performance to the introduction of “such a strong package of monetary and fiscal stimulus” under current president Pedro Castillo and his predecessors, Francisco Sagasti (2020-2021) and Martín Vizcarra (2018-2020). However, Velarde voiced concern that this recovery could be jeopardised by capital flight, noting that US$15bn had been taken out of the country in the year to date. He said that the bulk of this capital flight took place when uncertainty surrounding the results of Peru’s election and the plans of then-candidate Castillo was at its peak. “If you look at capital flight in May, it was 14 times greater than that which took place in October – basically, it was nervous investors that left very quickly.”