Itaú BBA - Macro Scenario – Peru: Political confrontation resumes

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Macro Scenario – Peru: Political confrontation resumes

August 6, 2020

Contagion reaccelerated in Peru as the economy reopens

For the version with all charts and tables, please open the attached pdf file


Contagion cases accelerated again in July as distancing measures were eased. The recent increase in the number of cases could slow the reopening of the economy.

Confrontation between the Executive and Congress resumed, as the legislative body rejected a vote of confidence on the newly appointed cabinet. Meanwhile, Congress continues to push for market-unfriendly measures.

We expect GDP for 2020 to fall by 11.9%. A large fiscal stimulus and an expansionary monetary policy will support a recovery in economic activity in 2H20. Amid a wide negative output gap and subdued inflation, we expect the BCRP to keep the policy rate at 0.25% for the long term.
 

João Pedro Bumachar
Julio Ruiz

For the version with all charts and tables, please open the attached pdf file



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