LIMA, Jan 10 (NNN-ANDINA) — .Growth in Peru is projected to rebound to 2.5% in 2024 and 2.3% in 2025, after contracting 0.4% in 2023, the World Bank said in its latest Global Economic Prospects report.
According to the multilateral organization, expanding output from major copper mines is expected to contribute to stronger activity.
“In addition, with inflation on a downward path, further reductions in policy interest rates are likely to support growth over the forecast period,” it stated.
However, the World Bank reported that Peru’s political uncertainty continues to affect consumer and business confidence and hinder investment projects.
“Although the price of copper is expected to decline modestly in 2024, increased mining production will still contribute to overall export growth,” it added.
On the other hand, growth in Latin America and the Caribbean is forecast to edge up from 2.2% last year to 2.3% in 2024 and then to 2.5% in 2025.
According to the report, the drag on economic activity from earlier monetary policy tightening is expected to diminish throughout 2024.
Furthermore, it concludes that conflict in the Middle East could result in higher energy prices, which could alter expected monetary policy paths.
In addition, the World Bank said that tighter global financial conditions could weigh on private demand and accelerate fiscal consolidation in the region.
It should be noted that extreme El Niño weather events related to climate change pose another downside risk.
According to the World Bank flagship report, global growth is expected to slow to 2.4% in 2024 —the third consecutive year of deceleration— reflecting the lagged and ongoing effects of tight monetary policies to rein in decades-high inflation, restrictive credit conditions, and anemic global trade and investment. — NNN-ANDINA
