Peru's Banco de Crédito outlines GDP forecasts for rest of 2020

Local lender Banco de Crédito del Perú estimates the country’s economy contracted around 8% year-on-year in September and that it shrank about 10% in the third quarter.

The figures compare to drops of 9.8% and 30.2% reported for August and 2Q20, respectively. The contraction in July was 11.7%

For 4Q20, the bank expects a drop of around 6% year-on-year.

Peru, like most countries in the region, was dealt an economic hammer blow by the coronavirus crisis. As of Tuesday, Peru had more than 890,000 confirmed cases and reported more than 34,000 deaths. 

Headwinds hampering a faster economic recovery are a wait-and-see approach adopted by private investors ahead of April’s presidential elections, populist measures seen in congress, high levels of unwanted inventory, and a severe deterioration in the labor market, the bank's research unit said in a statement.

Improvements in these areas, combined with the likes of stronger metals prices and better news on the pandemic front, would support a stronger rebound, the statement said.