Peru’s Economic Outlook

Julio Velarde
Governor
Central Reserve Bank of Peru

May 2023
Contents

Economic activity

External sector

Fiscal accounts

Monetary policy

Inflation

2
Peru has grown 4.3% on average over the last two decades (nearly twice the LatAm average).

REAL GDP AVERAGE ANNUAL GROWTH, 2001-2022 (%)

5.4

4.3
3.8 3.7 3.5
3.3
2.9
2.5
2.3 2.2
1.9
1.6

Panama Peru Colombia Bolivia Chile Paraguay Ecuador Uruguay LatAm Brazil Argentina Mexico

Standard Deviation

6.4 4.6 3.4 3.1 3.5 3.2 3.4 4.2 3.2 3.0 6.5 3.1

Source: IMF (World Economic Outlook Database, April 2023).

3
Since 2001, Peru's inflation has been among the lowest and least volatile in LatAm.

AVERAGE ANNUAL INFLATION RATE, 2001-2022 (%)

236.3

22.2

8.5
5.9 6.3 6.4
4.1 4.5 4.9
3.7 4.0
2.2 3.0

Panama Peru Chile Ecuador Bolivia Mexico Colombia Paraguay Brazil LatAm Uruguay Argentina Venezuela

Standard Deviation

2.3 2.1 2.9 4.8 3.2 1.5 2.6 3.4 2.5 2.6 4.2 22.8 27 653

Note: Calculated with end-of-period CPI.

Source: IMF (World Economic Outlook Database, April 2023). 4
 After one of the sharpest pandemic-related contractions worldwide, growth in Peru recovered
rapidly in 2021, then moderated.

SEASONALLY ADJUSTED INDEX OF ECONOMIC ACTIVITY

(Index 100 = 4Q 2019)
Dec-22 Feb-23
Dec-20 103 Q2.2020 Feb. 2023
105 102
100
Primary 78 100

95 Agro 100 104

Mining 65 95
85
Manufacturing 79 113

75 Non-Primary 67 103

Construction 35 104
65 Apr-20
61 Manufacturing 54 100

55 Services 74 102
Apr-20

Jun-20

Aug-20

Apr-21

Jun-21

Aug-21

Apr-22

Jun-22

Aug-22
Dec-19

Feb-20

Oct-20

Dec-20

Feb-21

Oct-21

Dec-21

Feb-22

Oct-22

Dec-22

Feb-23
Accommodation 12 89
----------& Restaurants
Financial Services 107 107

4Q21 1Q22 2Q22 3Q22 Oct.22 Nov.22 Dec.22 4Q22 Jan.23 Feb.23 Total GDP 70 102

Peru 101.5 102.4 102.6 103.3 103.5 103.3 102.9 103.7 101.2 101.9

Source: INEI and BCRP. 5

 Leading indicators show a decreasing trend in consumption and investment, yet consumer
expectations rebounded in March.

DOMESTIC VALUE-ADDED TAX EXPECTATIONS REGARDING THE FAMILY

(YoY nominal % change) SITUATION IN 12 MONTHS
(Diffusion index)
70 59 60
28.6 53 54 55
60 51 51
17.9 50
13.8 15.0 13.8 14.3 37
11.3 10.6 11.3 10.9 40
4.3 4.7 4.2 30
20
-0.1
-3.5 -2.3 10

May-22

Jul-22
Jan-22

Mar-22

Jun-22

Jan-23

Mar-23
Feb-22

Oct-22

Nov-22

Dec-22

Feb-23
Apr-22

Aug-22

Sep-22
Apr-22

Aug-22

Sep-22

Oct-22

Nov-22

Dec-22

Apr-23
Jan-22

Jun-22

Jan-23
May-22
Feb-22

Mar-22

Jul-22

Feb-23

Mar-23
DOMESTIC CEMENT CONSUMPTION PUBLIC INVESTMENT
(YoY % change) (YoY real % change)
6.4
3.5 2.3
1.9 1.7 1.3 40.4
27.5
-1.6 -2.4 -2.1 17.8
-3.8 10.0 8.6 8.8 10.6 12.0
5.0
-6.4 -6.7 0.5

-5.1 -3.8 -2.5

-15.1 -15.6 -15.4 -8.5 -8.3
-25.6
May-22

Jul-22
Jan-22

Mar-22

Jun-22

Jan-23

Mar-23*
Feb-22

Oct-22

Nov-22

Dec-22

Feb-23
Apr-22

Aug-22

Sep-22

May-22

Jul-22
Jan-22

Mar-22

Jun-22

Jan-23

Mar-23
Feb-22

Oct-22

Nov-22

Dec-22

Feb-23
Apr-22

Aug-22

Sep-22

Apr-23
* Preliminar. 6
Source: BCRP.
 Mainly, growth in 2023 is expected to be driven by a recovery in primary sectors.

GROSS DOMESTIC PRODUCT

Average 2001-2019
2020
(Real Annual % Change)
2021
2022 15.4
2023* 13.3

6.4
4.9 5.1 5.2
3.9 3.2
2.7 2.6 1.9
0.6

-7.6

-11.0
-11.9

GDP Primary GDP Non-primary GDP

* Forecast.
Source: BCRP. 7
 On the expenditure side, a slowdown in private consumption is forecast for 2023.

GROSS DOMESTIC PRODUCT

Average 2001-2019 (Real Annual % change)
2020 36.9
2021
2022
24.8
2023*

12.4 13.2
6.7 7.7 6.1
4.9 3.6 4.6 4.9 3.9
2.8
1.0

-0.4 -0.5

-9.9
-16.5 -15.1
-19.7

Private consumption Private investment Public investment Exports

* Forecast.
Source: BCRP. 8
 The number of formal workers has exceeded pre-crisis levels since August 2021.

FORMAL WORKERS PRIVATE SECTOR WORKERS

(YoY % change) (YoY % change)
12.0
9.6
8.5 10.5
7.7 9.0 9.3 8.9
7.1 7.9 7.9 7.4 7.6
6.6 6.6 6.4 6.2 6.2 7.6
6.1 6.9
5.5 5.4 5.1 6.4 6.1
4.5 4.6 5.8 6.1
5.1 5.0 4.8
2.7 2.6 2.6

Nov-21

Dec-21

Feb-22

May-22

Jul-22

Nov-22

Dec-22

Feb-23
Aug-22

Sep-22
Oct-21

Oct-22
Jan-22

Mar-22

Apr-22

Jun-22

Jan-23

Mar-23
Nov-21

Dec-21

Feb-22

Jul-22
May-22

Nov-22

Dec-22

Feb-23
Aug-22

Sep-22
Oct-21

Apr-22

Oct-22
Jan-22

Mar-22

Jun-22

Jan-23

Mar-23
Total Dec.19 Dec.21 Mar.22 Dec.22 Jan.23 Feb.23 Mar.23 Private Sector Dec.19 Dec.21 Mar.22 Dec.22 Jan.23 Feb.23 Mar.23

Jobs, thousands 5,447 5,556 5,717 5,797 5,559 5,501 5,865 Jobs, thousands 3,921 3,923 4,131 4,163 4,036 3,960 4,328

Source: SUNAT. 9
 Business confidence, which fell in January amid political unrest, has recovered since February.

BUSINESS EXPECTATIONS ABOUT:

(Difussion Index)
OVERALL ECONOMY THEIR OWN SECTOR
100
100 3 months
3 months
90 12 months
12 months 90
80
80 Optimistic
Optimistic
70 70
Apr-23: 54
60 Apr-23: 54
60
50 50
40 40
30 30 Apr-23: 46
Pessimistic
Apr-23:44 Pessimistic
20 20

10 10

0 0
F M A N F M A N F M A N F M A N F J.19 A J O J.20 A J O J.21 A J O J.22 A J O J.23 A

Source: BCRP. 10
 Expectations about company performance and product demand are the indices that have
recovered the most.

BUSINESS EXPECTATIONS ABOUT:

(Difussion Index)
THEIR OWN COMPANY DEMAND OF THEIR PRODUCTS
100
100 3 months
3 months
90 12 months
12 months 90
80 80
Optimistic
Optimistic
70 70
Apr-23: 58 Apr-23: 60
60 60
50 50
40 40 Apr-23: 51

30 Apr-23:49 30
Pessimistic Pessimistic
20 20

10 10

0 0
J.19 A J O J.20 A J O J.21 A J O J.22 A J O J.23 A J.19 A J O J.20 A J O J.21 A J O J.22 A J O J.23 A

Source: BCRP. 11
Contents

Economic activity

External sector

Fiscal accounts

Monetary policy

Inflation

12
Some supply shocks, like freight rates and food prices, have lessened their impact on the global
economy.

GLOBAL SUPPLY CHAIN PRESSURE INDEX & FAO FOOD PRICE INDEX
5.0 180.0
4.32
GSCPI

FAO Food Price Index (2014-2016=100)

159.7
4.0 160.0
FAO Food Price Index
GSCPI (std. deviations)

3.0 140.0
127.2

2.0 120.0

1.0 100.0

91.1
0.0 80.0
0.10

-1.0 60.0
-1.15
-2.0 40.0
2016 2017 2018 2019 2020 2021 2022 2023

Note: Data as of April. GSCPI is computed from global transportation costs (Baltic Dry Index, Harpex Index, and airfreight costs index from U.S. BLS)
and PMI components of the U.S., China, euro area, Japan, United Kingdom, South Korea, and Taiwan.
Source: Federal Reserve Bank of New York, FAO.

13
A significant improvement in the terms of trade is expected to boost the trade surplus in 2023-2024.

TRADE BALANCE AND TERMS OF TRADE, 2014-2023

(Million USD, Index 2007 = 100, respectively)
140 14 927 16 000
13 844 14 233
Trade balance Terms of Trade 14 000
120 116
108 109 12 000
104
100 10 333 10 000
8 102
7 201 6 879 8 000
80 6 704
6 000
60
4 000
1 958
40 2 000

0
20
-1 505 -2 000

0 -2 912 -4 000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* 2024*
*Forecast.
Source: BCRP.
14
 The current account deficit is projected to decline due to a higher trade surplus and lower
transportation costs.

CURRENT ACCOUNT, 2014-2024

(Percentage of GDP)

1.1 Current
Account 2020 2021 2022
(% of GDP)
Brazil -1.9 -2.8 -2.9

Uruguay -0.9 -2.7 -2.5

-0.6
-0.8 -0.8 Colombia -3.5 -5.6 -6.2
-1.2
-1.4
Mexico 2.1 -0.6 -0.9
-2.2 -2.2 Peru 1.1 -2.2 -4.0

Chile -1.9 -7,3 -9,0

Source: IMF (WEO April 2023) and BCRP (Peru).

-4.0
-4.2
-4.6
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* 2024*

*Forecast.
Source: BCRP. 15
 Short-term capital outflows fell from a peak in 2021. Long-term private capital is expected to
continue financing the current account deficit.

SHORT-TERM CAPITAL FLOWS LONG-TERM PRIVATE CAPITAL FLOWS

(% of GDP) (% of GDP)
0.4 0.2
0.0 0.0
0.0 7.3 8.0
FDI Others Total
-0.3 6.0
-0.7 -0.5
-0.8 -0.9 6.0
4.6 4.1 1.5
-1.8 -2.0
3.8 0.8 4.0
1.7 3.5 1.1 3.3 3.2
-4.0 2.6 4.4 2.0
3.8 1.1 3.4 3.3
0.8 2.0
2.1 0.2 1.7 0.9
0.4 0.0
-1.0
-6.0 -1.8 -1.7 -1.6
-2.4 -2.3
-3.3
-2.0
-1.3

-7.3
-8.0 -4.0
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023*

2024*

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023*

2024*
Minus (positive) sign implies net capital outflow (inflow).
* Forecast.
16
Source: BCRP.
 Total external debt is projected to continue declining in the forecast horizon.

MEDIUM AND LONG-TERM GROSS EXTERNAL DEBT

(% GDP)
45.0 41.0
38.0 Total
40.0
34.8
32.5 Total Gross
35.0 External Debt 2022
(% of GDP)
30.0 26.8
24.6 Brazil 35.9
23.2 22.7
25.0
Peru 41.8
20.0 Public Colombia 53.5
14.1 13.4
15.0 11.6 Chile 77.2
9.8
10.0 Source: Trading Economics (total gross
Private external debt), IMF-WEO (GDP, except
for Peru), and BCRP (Peru’s GDP).
5.0 Includes Short-term liabilities.

0.0

2023*

2024*
2014

2015

2016

2017

2018

2019

2020

2021

2022
* Forecast.
Source: BCRP. 17
Contents

Economic activity

External sector

Fiscal accounts

Monetary policy

Inflation

18
 The fiscal deficit is likely to stay below 2.0% of GDP in the forecast horizon.

NON FINANCIAL PUBLIC SECTOR: OVERALL BALANCE

(Percentage of GDP)
Fiscal Rule
2.3 2022 2023 2024
-3.7 -2.4 -2.0 Overall
0.9 balance 2019 2020 2022* 2023**
(% of GDP)

-0.3 Peru -1.6 -8.9 -1.7 -1.6

Chile -2.7 -7.1 1.3 -1.8
-1.6 -1.7 -1.6 -1.5
-1.9 -2.3
Uruguay -2.8 -4.7 -2.5 -2.2
-2.4 -2.5
-3.0 Paraguay -3.8 -7.2 -4.5 -3.3
Colombia -3.5 -7.0 -6.7 -4.0
Mexico -2.3 -4.4 -4.4 -4.1
Brazil -5.8 -13.3 -4.6 -8.8
* Forecast for Colombia and Paraguay.
** Forecast.
Source: IMF-World Economic Outlook (April
-8.9 2023) and BCRP (Peru).

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* 2024*
* Forecast.
Source: BCRP
19
 Reduced fiscal deficits in Peru have resulted in the lowest public debt ratio in LatAm.

NON FINANCIAL PUBLIC SECTOR DEBT

(Percentage of GDP)
Gross debt
Net debt
Gross Debt
2019 2020 2021 2022* 2023**
(% of GDP)

35.9 Peru 26.6 34.6 35.9 33.8 32.8

34.6 33.8 32.8 32.1 Chile 28.3 32.4 36.3 38.0 36.6
Paraguay 25.8 36.9 37.5 40.9 40.4
26.6
Mexico 53.3 60.1 58.7 56.0 55.6
22.2 21.8 21.4 21.2
21.0
Colombia 52.4 65.7 64.0 63.6 62.0
Uruguay 60.6 68.2 65.6 61.0 62.3
12.9
Brazil 87.9 96.8 90.7 85.9 88.4
* Forecast for Colombia and Paraguay.
** Forecast.
Source: IMF-World Economic Outlook (April 2023) and
BCRP (Peru).

2019 2020 2021 2022 2023* 2024*

* Forecast.
Source: BCRP.
20
 Peru’s sovereign yield is the second-lowest in LatAm.

10 YEAR SOVEREIGN BOND YIELDS

(Percentage, end of period)
Dec.20 Dec.21 Sep.22 Dec.22 May.23*
Peru Peru 3.5 5.9 8.8 8.0 7.2
Colombia 5.4 8.2 12.8 13.1 11.0
Colombia
16 Mexico 5.5 7.6 9.7 9.0 8.8
15 Mexico Brazil 6.9 10.8 12.0 12.7 11.8
14 Brazil
Chile 2.7 5.7 6.9 5.2 5.5
13 * As of May 16.
12 Chile

11
10
9
8
7
6
5
4
3
2
Oct-19

Dec-19

Oct-20

Oct-22
Jun-20

Dec-20

Jun-21

Oct-21

Dec-21

Jun-22

Dec-22
Apr-20

Aug-20

Apr-21

Aug-21

Apr-22

Aug-22

Apr-23
Feb-20

Feb-21

Feb-22

Feb-23
Source: Reuters. 21
 In May 2023, the yield curve of sovereign bonds shifted downwards compared with December
2022. Non-resident investors increased their share of sovereign bond holdings from 39% in
March to 40% in May 2023.

PERU SOVEREIGN BONDS YIELD CURVE STOCK OF SOVEREIGN BONDS AND NON-RESIDENT BOND HOLDINGS
(Percentage points, end of period) (Stock in millions of S/ and holdings in %)
9 Sovereign bond stock
7.98 Dec. 22 (In million of S/)
May.23**
7.84 Sovereign bonds (left axis)
8
May. 23* % Non resident holdings (right axis)
Non resident (Nominal) 56 297
7.39 Total 141 086
7
7.18
6.88(Million of S/) 53
Dec. 21 140 000 (%)
6 51 50
6.05 49 49
120 000 48 50.0
5 47
Dec. 20 5.13 45
100 000
44 45.0
4
80 000 42
41 41
3.80
3 60 000
39 39 40 40.0

2 40 000
35.0
20 000
1
0 30.0
0

Mar-21

Jun-21

Mar-22

Jun-22

Jan-23

Mar-23

May-23**
Dec-19

Dec-20

Dec-21

Dec-22

Feb-23
Sep-21

Sep-22

Apr-23
2023 2024 2026 2028 2029 2031 2032 2034 2037 2040 2042 2055
*As of May 16. ** Preliminary information. As of May 15.
Source: MEF. 22
Source: BCRP, CAVALI, MEF, SBS.
Contents

Economic activity

External sector

Fiscal accounts

Monetary policy

Inflation

23
 The BCRP held the reference rate at 7.75% in May 2023, not signaling the end of the tightening
cycle. Approach is data-dependent.

NOMINAL AND REAL INTEREST RATE*

10.00 (In percentage)
8.00
7.75

Nominal interest rate Real interest rate

6.00

4.00 3.50

2.00

0.00

-2.00

-4.00
Jul-18
Sep-18

Jan-19

Jul-19
Sep-19

Jan-20

Jul-20
Sep-20

Jan-21

Jul-21
Sep-21

Jan-22

Jul-22
Sep-22

Jan-23
May-18

Nov-18

Mar-19
May-19

Nov-19

Mar-20
May-20

Nov-20

Mar-21
May-21

Nov-21

Mar-22
May-22

Nov-22

Mar-23
May-23
Dec.20 Jul.21 Aug.21 Dec.21 Mar.22 Jun.22 Sep.22 Dec.22 Jan.23 Feb.23 Mar.23 Apr.23 May.23
(I) Nominal Rate 0.25 0.25 0.5 2.5 4.000 5.500 6.75 7.50 7.75 7.75 7.75 7.75 7.75
(II) Inflation Expectations 1.68 2.6 3.03 3.71 3.75 4.89 5.10 4.68 4.30 4.62 4.29 4.30 4.25
(III) Real Rate: (I)-(II) -1.43 -2.35 -2.53 -1.21 0.25 0.61 1.65 2.82 3.45 3.13 3.46 3.45 3.50
* Real interest rates are computed with 12-months-ahead inflation expectations (ex-ante real interest rates).
Source: BCRP. 24
 Peru's policy rate is among the lowest in LatAm, with output near potential and lower inflation
expectations.

MONETARY POLICY RATES IN LATAM (%)

Dec-21 Dec-22 May-23*

13.25 13.75 12-M-Ahead Ex Ante

13.75 Inflation Real Interest
11.25 11.25 Expectations** Rate
12.00 9.25
11.25
10.50 Peru 4,25 3,50
7.75
5.50 Colombia 7,00 6,25
7.50
4.00
3.00 Mexico 4,89 6,36
2.50
Chile 4,30 6,95

Brazil 5,74 8,01

Brazil
Colombia
Peru

Chile

Mexico

* As of May 11, 2023. Inflation expectations as of April 2023 (for Chile as of May).
**Obtained by interpolation based on December 2023 and 2024 forecasts for Brazil and Mexico (other central banks publish data directly)
Source: Central Banks.
25
 Dec-17 Dec-17

8.3
8.8
Dec-18 Dec-18
Dec-19 Dec-19

8.8
13.3

Source. BCRP.
Jan-20 Jan-20
Feb-20 Feb-20

9.4
13.2
Mar-20 Mar-20
Apr-20 Apr-20

6.9
6.9

May-20 May-20
Jun-20

4.4
Jun-20
1.7

Jul-20 Jul-20
Aug-20

3.2
Aug-20
-2.6

Sep-20 Sep-20
Oct-20

2.9
Oct-20
-5.1

Nov-20 Nov-20
Dec-20

3.0
Dec-20
-7.1

Jan-21 Jan-21
Feb-21

3.2
Feb-21
-11.1

Mar-21 Mar-21
Apr-21
5.7

Apr-21
-8.2

May-21 May-21
Jun-21
7.2

Jun-21
-5.5

Jul-21 Jul-21
Aug-21
7.5

Aug-21
-2.8

Sep-21 Sep-21
Oct-21
7.1

Oct-21
MORTGAGE CREDIT
-1.1

Nov-21 Nov-21
(Annual percentage change)
CONSUMPTION CREDIT
(Annual percentage change)

Dec-21
7.1

Dec-21
3.1

Jan-22 Jan-22
Feb-22
6.7

Feb-22
9.7

Mar-22 Mar-22
Apr-22
7.2

Apr-22
16.4

May-22 May-22
Jun-22
8.1

Jun-22
21.2

Jul-22 Jul-22
Aug-22
8.7

Aug-22
23.0

Sep-22 Sep-22
Oct-22 Oct-22
23.9

Nov-22
8.8 8.5

Nov-22
Dec-22
8.0

Dec-22
21.8

Jan-23 Jan-23
Feb-23
7.4

Feb-23
20.4

Mar-23
6.7

Mar-23
17.7
As of March 2023, growth in mortgage and consumer credit has moderated compared to 2022.

26
The BCRP’s liquidity operations balance reached a historical high in January 2021, but has since
decreased due to reduced state-backed repo operations.

BALANCE OF LIQUIDITY OPERATIONS OF THE BCRP*

(S/ million)
Episodes:
70 000 1. Global Financial Crisis: 2.2% of GDP
2. De-dollarization Program: 5.2% of GDP
60 000 3. Covid 19:
January 31, 2021 9.1% of GDP
50 000 May 10, 2023 4.5% del PBI

40 000

30 000

20 000

10 000

0
Sep-13

Sep-14

Sep-15

Sep-16

Sep-17

Sep-18

Sep-19

Sep-20

Sep-21

Sep-22
May-13

May-14

May-15

May-16

May-17

May-18

May-19

May-20

May-21

May-22

May-23
Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Securities Currency Others** Portfolio (Public Guarantee) - Settlement
* As of May 10, 2023.
** The item “Others” includes the purchase of Public Treasury bonds, in line with article 61 of the BCRP Organic Law, and Repos operations of portfolio loans.
Source: BCRP. 27
 The Peruvian Sol (PEN) has continued appreciating since 2022.

LATAM: EXCHANGE RATE

Monetary unit per dollar
(Index 100=31 Dec 2008)
Cumulative
May.23* / May 23* / May 23*/
% chg.
Peru Dec.20 (%) Dec.21 (%) Dec.22 (%)
2022 vs 2000
275
Chile Peru (PEN) 8.0 2.2 -7.3 -2.8
250 Chile (CLP) 48.2 12.5 -6.2 -6.1
Mexico Colombia (COP) 116.9 34.0 11.4 -6.7
225
Colombia Mexico (MXN) 102.6 -12.1 -14.7 -10.2
200 Brazil (BRL) 171.1 -4.9 -11.3 -6.5
Brazil
175

150

125

100

75

50
Feb-01
Jul-01
Dec-01
May-02

Nov-04

Feb-06
Jul-06
Dec-06

Nov-09

Feb-11
Jul-11
Dec-11

Nov-14

Feb-16
Jul-16
Dec-16

Nov-19

Feb-21
Jul-21
Dec-21
Aug-03

Sep-05

May-07

Aug-08

Sep-10

May-12

Aug-13

Sep-15

May-17

Aug-18

Sep-20

May-22
Oct-02

Oct-07

Oct-12
Mar-03

Apr-05

Apr-15

Oct-17

Apr-20

Oct-22
Jan-04
Jun-04

Mar-08

Apr-10
Jan-09
Jun-09

Mar-13

Jan-14
Jun-14

Mar-18

Jan-19
Jun-19

Mar-23
* As of May 16.
Source: Reuters. 28
Peru has the lowest FX volatility in LatAm, thanks to its solid macroeconomic fundamentals.

HISTORICAL VOLATILITY – 1 MONTH

(Standard Deviations of Daily FX Returns, Annualized)

40 Q1. 2022 Q2. 2022 Q3. 2022 Q4. 2022 Q1. 2023 Q2. 2023* Peru
Brazil 14.2 19.8 19.1 19.5 15.0 12.8
Chile 15.1 14.9 30.2 18.6 14.8 13.4 Brazil
35 Colombia 11.3 17.3 20.6 16.7 16.8 16.4
Chile
Mexico 9.6 11.2 11.2 9.2 12.7 7.5
Peru 10.2 9.5 7.8 5.5 6.1 4.6 Colombia
30
*As of May 16.
1/ Annualized standard deviations of daily returns. Mexico
25

20

15

10

0
Jan-21

Jun-21

Jul-21

Jan-22

Jun-22

Jul-22

Jan-23
May-21

Oct-21

May-22

Oct-22

May-23
Apr-21

Apr-22

Apr-23
Nov-21

Dec-21

Nov-22

Dec-22
Aug-21

Sep-21

Aug-22

Sep-22
Mar-21

Mar-22

Mar-23
Feb-21

Feb-22

Feb-23
*As of May 16.
Source: Reuters. 29
 Peru's robust external position is backed by a considerable FX reserve buffer and a
precautionary USD 5.4bn IMF FCL.

INTERNATIONAL COVERAGE INDICATORS

2019 2020 2021 2022 2023*
NIR as percentage of:
FOREIGN EXCHANGE RESERVES a) GDP 29.4 36.3 34.8 29.4 27.8
(Billions of USD) b) Short term external debt 1/ 498 543 492 430 512
c) Short term external debt +
455 648 373 270 404
current account deficit
78.5 76.7
74.7 71.9 1/ Includesthe stock of short-term debt plus 1 year ahead amortization of private and
68.3 public debt.
65.7 63.6 *Forecast.
62.3 61.5 61.7 60.1
FX Reserves
2022
(% of GDP)
Brazil 16.9
Colombia 16.7
Mexico 14.2
Peru 29.4
Chile 13.0
Argentina 5.6
Source: GDP is obtained from the IMF – WEO
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023** (April 2023), except for Peru (BCRP).
**As of May 15.
Source: BCRP.
30
Contents

Economic activity

External sector

Fiscal accounts

Monetary policy

Inflation

31
Inflation momentum is decreasing in several countries.

INFLATION RATES AND INFLATION TARGETS – APRIL 2023

(YoY % chg.)
Inflation target
[2,0 – 4,0] Colombia 12.8
[2,0 – 4,0] Chile 9.9
[1,0 – 3,0] Peru 8.0
[2,0 – 4,0] Mexico 6.3
2,0 United States 4.9
[1,75 – 4,75] Brazil* 4.7

[3,0 – 7,0] Turkey 43.7

5,0 Ukraine 17.9
2,0 United Kingdom* 10.1
2,0 Italy 8.3
2,0 Germany 7.2
2,0 Eurozone 7.0
2,0 France 5.9
2,0 Spain 4.1
4,0 Russia* 3.5

[2,0 – 6,0] India* 5.7

[1,0 – 3,0] Israel* 5.0
2,0 South Korea 3.7
*As of March.
Source: Trading Economics. 32
 After peaking at 8.81% in June 2022, headline inflation decreased to 7.97% in April 2023.

HEADLINE INFLATION, 2007 - 2023

(YoY % change)
16.0
Average
01-20
Dec. 19 Dec. 20 Dec. 21 Dec.22 Apr.23
14.0
Headline inflation 2.6 1.9 2.0 6.4 8.5 7.97%
12.0
Excl. food and energy 2.1 2.3 1.8 3.2 5.6 5.66%
10.7
10.0 Food and energy 3.2 1.4 2.2 10.2 12.0 10.74%

8.0 8.0

6.0
5.7
4.0

2.0

0.0

-2.0
Headline inflation Food and energy Excl. food and energy
-4.0
Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-21

Apr-22

Apr-23
Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Oct-12

Oct-13

Oct-14

Oct-15

Oct-16

Oct-17

Oct-18

Oct-19

Oct-20

Oct-21

Oct-22
Source: BCRP. 33
 Twelve-month-ahead inflation expectations are falling.

12-MONTHS-AHEAD INFLATION EXPECTATIONS

6.0 (YoY % chg.)
Jun-22: 5.4

5.0

4.0 Apr-23:4.3

3.0

2.0

1.0

0.0
Nov-07

Jul-08
Nov-08

Jul-09
Nov-09

Jul-10
Nov-10

Jul-11
Nov-11

Jul-12
Nov-12

Jul-13
Nov-13

Jul-14
Nov-14

Jul-15
Nov-15

Jul-16
Nov-16

Jul-17
Nov-17

Jul-18
Nov-18

Jul-19
Nov-19

Jul-20
Nov-20

Jul-21
Nov-21

Jul-22
Nov-22
Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23
Average expectations of the financial system and economic analysis. An estimate of the 12-month expectation is obtained by weighting the expectation
for the current year by the number of months remaining and the expectations for the following year by the number of months remaining to complete the
12 months.
Source: BCRP. 34
 As of May, the number of goods with YoY price changes above 3% has decreased.

% OF CPI ITEMS WITH YOY VARIATION GREATER DISTRIBUTION OF YOY VARIATION OF

THAN 3% RETAIL PRICES
80

70 >9%
72

60
5-9%
50
3-5%
40
<3%
30

20

10

0 Date​ < 3 %​ 3% - 5%​ 5% - 9%​ > 9%​

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Apr 30, 2021​ 78.5%​ 4.2%​ 5.1%​ 12.2%​

Aug 21, 2022
27.5%​ 3.3%​ 9.1%​ 60.1%​
(Maximum)​
May 12, 2023 45.0%​ 6.5%​ 10.6%​ 37.8%​
Source: BCRP. 35
 A smaller percentage of companies have increased their prices once or more within a year,
except those in the services sector.

FREQUENCY OF PRICE ADJUSTMENTS IN A YEAR (% OF COMPANIES)

More than once Once Less than once

82

67
63 63 62
59
56
52
44
41
33 32 31
26
21 23
15
12
5 6
3 3
0 0
Aug.22 Apr.23 Aug.22 Apr.23 Aug.22 Apr.23 Aug.22 Apr.23
Extractive industries Manufacturing Commerce Services

Source: BCRP. 36
 Peru's headline and core inflation rates are among the lowest in LatAm.

INFLATION IN LATAM AND DEVELOPED COUNTRIES, YoY % chg.

16,0
BRAZIL CHILE COLOMBIA MEXICO PERU
14,0
12,8
12,0
10,0 10,5
9,9
8,7
8,0 7,7 8,0
7,3
6,0 6,3
5,7
4,0 4,2
2,0
0,0
ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
Total Core Target range
12,0 UNITED STATES EURO AREA UNITED KINGDOM
GERMANY SPAIN

10,0 10,1
8,0
7,0 7,2
6,6
6,0 5,5 5,6 5,8 5,8
4,9
4,0 4,1

2,0

0,0
ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec

ago
dec
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22

apr.23
apr.21

apr.22
37
Note: Brazil’s energy component refers to energy at home. Brazil and Peru food price indexes include the component of food-away-from-home. Source: Central Banks and national statistics offices.
 Inflation is expected to return to target by end-2023 due to the reversal of global supply shocks, low
inflationary demand pressures, and inflation expectations returning within the target band.

HEADLINE INFLATION FORECAST, 2023-2024

(YoY % change)
Weight 2010-19 2020 2021 2022 2023* 2024*
Headline inflation 100.0 2.9 2.0 6.4 8.5 3.0 2.4
12 12
1. Core inflation 55.3 2.4 1.8 3.2 5.6 3.2 2.5
11 11

Probability around baseline scenario (%)

2. Food and energy 44.7 3.4 2.2 10.2 12.0 2.8 2.3
10 10
9 9
8 8
7 7
6 6
5 5

Maximum 4 4
Inflation 3 3
target
range 2 2

Minimum 1 1
0 0
-1 -1
-2 -2
-3 -3
* *
2019 2020 2021 2022 2023 2024
Note: The graph shows the probability of occurrence of inflation values in the future, according to the combination of statistical analysis and the balance of risks. Each band concentrates 5%
of probability and the total of bands cover 90% of probability. The darkest bands contain the trajectory of the base scenario.
38
Source: BCRP.
Peru’s Economic Outlook

Julio Velarde
Governor
Central Reserve Bank of Peru

May 2023
 Principales proyectos mineros postergados

Los proyectos mineros que se han venido postergando suman US$ 25 mil millones.

PRINCIPALES PROYECTOS MINEROS CON ESTUDIO DE IMPACTO AMBIENTAL Y/O EN EXPLORACIÓN

INVERSIÓN
PROYECTO UBICACIÓN INVERSIONISTA
(Mill. de US$) *
CONGA CAJAMARCA Newmont/Buenaventura 4 800
EL GALENO CAJAMARCA China Minmetals Corp 3 500
First Quantum Minerals
HAQUIRA APURÍMAC 2 500
Ltd
PAMPA DEL
AREQUIPA Jinzhao Mining 1 500
PONGO
TÍA MARIA AREQUIPA Southern 2 400
ZAFRANAL AREQUIPA Teck Resources 1 500
Rio Tinto (Conversaciones
LA GRANJA CAJAMARCA 5 000
con First Quantum Metals)
PUKAQAQA HUANCAVELICA Nexa Resources Peru 706
CAÑARIACO CAJAMARCA Candente Copper Corp 1 500
MICHIQUILLAY CAJAMARCA Southern 2 000
* Estimado.
Fuente: BCRP y Ministerio de Energía y Minas 40