The significant initial economic impact of the COVID-19 pandemic is gradually fading as several sectors in the country resume their activities,
Moody's Investors Service has reported.
The credit-rating agency says that Peru's healthy economic fundamentals point to a strong post-pandemic rebound of around 8% economic growth in 2021, well above expectations for the rest of Latin America.
There is no doubt this projection contributes to improving the business expectations for the remainder of the year in preparation for 2021, an opinion that the
Central Reserve Bank of Peru (BCR) recorded in its last surveys.
According to its August poll, company situation expectations for the next 12 months stood at 64 points, compared to the 60 points recorded in July.
It is a result that is above 50 points reflects optimism about expectations. Likewise, firms' investment expectations for the next 12 months rose to 52 points in August, after reaching 49 points in July.
Investments
According to Moody's, while Peru's mining sector was briefly affected at the outset of the pandemic and faced operational disruptions for a couple of months due to the lockdown health measures,
operations resumed rapidly.
"Large mining projects will continue to develop through 2021," the risk assessment firm underlined.
Retail sector
According to the agency, Peru's retail sector will regain some ground in 2021 but will not fully recover from the consequences of the pandemic until 2023.
Moreover, store-based retailers will have to implement health protocols and limit crowds, eroding their profitability.
On the other hand, consumers will continue to defer consumption outside home, keeping demand weak for restaurants, leisure, and entertainment, but strong for grocery stores, whose sales surged after the quarantine began in March 2020.
Furthermore, the acceleration toward e-commerce will increase competition among Peru's retailers as well.
(END) MDV/RMB/MVB
Published: 9/19/2020