Global Economic Times

Peru's Economy on the Upswing: Poverty Rates Set to Decline: Eugenio Rodolfo Sanabria Reporter / Updated : 2024-12-27 20:24:35

Lima, Peru – Peru's Ministry of Economy and Finance (MEF) has projected a significant decrease in poverty rates this year, driven by the nation's robust economic performance. The government is considering conducting a preliminary survey to gauge the extent of this progress before the official data is released by the National Institute of Statistics and Information (INEI).

“It would be beneficial to conduct a survey to assess our progress, as the definitive data will be published by the INEI. We haven’t initiated this process yet,” stated Economy Minister José Arista.

Key Sectors Driving Growth

Arista highlighted the exceptional performance of the fishing and agriculture sectors as primary contributors to Peru's economic growth. The fishing industry is expected to see a substantial 30% increase this year, while agriculture, across coastal, highland, and lowland regions, has also shown positive results.

"In 2023, these two sectors, which are considered engines of production, were stagnant. This impacted employment and incomes generated by these activities. Consequently, when poverty levels were measured, it reflected in the statistics," explained Arista.

Contrasting 2023 Trends

The minister contrasted this year's positive outlook with the 1.5 percentage point increase in poverty rates observed in 2023, which raised the overall figure to 27.7%.

Central Bank's Perspective

The Central Reserve Bank of Peru (BCRP) shares the MEF's optimism, citing economic recovery and controlled inflation, particularly in food prices, as factors contributing to the anticipated decline in poverty.

Academic Analysis

Jorge González Izquierdo, an economics professor at the Pacific University, suggested that Peru's 3% economic growth could lead to a reduction in the poverty index by up to 0.6 percentage points.

Investment Surge

Arista emphasized the pivotal role of private investment in driving Peru's economic growth, with a 2.6% expansion. Public investment has also contributed significantly, reaching 53.5 billion soles by December 25.

Moreover, the government has allocated 3 billion soles for Public-Private Partnerships (PPPs), a threefold increase from the previous year, with total awards reaching nearly 9 billion dollars in 2024.

Overall, the positive economic indicators and targeted government initiatives suggest a promising outlook for poverty reduction in Peru.