Peru preparing stimulus measures for mining, agriculture amid recession

LIMA – Peru’s government is preparing measures to jumpstart growth in key sectors like mining and agriculture amid a recession, Economy Minister Alex Contreras said on Monday.

“We are going to announce stimulus measures very soon for certain sectors. We are working with the mining and agriculture sectors,” he said after a cabinet meeting.

“The idea is to be able to reverse the country’s structural growth trend.”

Contreras admitted for the first time on Friday that Peru, the world’s second-largest copper producer, is “without a doubt” going through a recession, after months of contractions due to the adverse effects of the El Nino weather phenomenon, lower private investment and lingering social conflicts.

Peru’s central bank sees economic growth of 0.9% this year and the government forecasts a 1.1% expansion. Analysts, however, consider both views to be too optimistic and some predict the economy could contract in 2023.

After the fallout from the COVID-19 pandemic, this would mark Peru’s worst economic performance since the end of the last century.

“Mining has been growing at double digits, but the statistical effect of Quellaveco (the copper mine that began operations last year) has been moderating and that is why we are going to launch a mining package,” Contreras said, without giving details on the package.

Meanwhile, the agriculture sector recorded its seventh consecutive monthly drop in August, hit by adverse weather with intense rains in Peru’s agro-exporting north.

Contreras also said he has sent a bill to Congress to provide “incentives” to the textile sector to boost output, which has fallen for five consecutive months. – Reuters