BCRP’s Julio Velarde highlights two qualities needed in Peru’s new president

Julio Velarde gave a conference at ADEX and talked about the deficit, inflation, growth in Peru and the new elections. - Infobae/Andina Composition Credit/Adex Capture
Julio Velarde gave a conference at ADEX and talked about the deficit, inflation, growth in Peru and the new elections. – Infobae/Andina Composition Credit/Adex Capture

Association of Exporters, Addexorganized the keynote speech “Peru on the World Stage: Economic Prospects 2025” where Julio Velarde FloresPresident A Central Reserve Bank (BCRP) took part, giving his estimate of inflation this year, as well as warning of a growing budget deficit and the upcoming election in 2026.

Velarde reflected on the fact that the next president of Peruand emphasized that good communication with citizens is needed – as you know, the current president In Bolwart She has been criticized many times for not giving interviews or responding to the press. Likewise, he suggested that the next president should be sympathetic to the needs of the public.

“A statesman can dictate unpopular measures, but if he explains it clearly and sympathetically, it will reach all segments and regions of the country. In addition, he must show by his actions his orientation to serve the Peruvians and call the appropriate people to create a good government,” he added.

Julio Velarde believes that the proper functioning of the economy requires clear rules, and this depends on the political sector. - Credit AFP
Julio Velarde believes that the proper functioning of the economy requires clear rules, and this depends on the political sector. – Credit AFP

He president of the BCSR noted that Peru’s accumulated growth during the 21st century has exceeded that of most other economies in the region. Also, I would like to point out that our period of greatest growth occurred between 2005 and 2013, with growth of 6.6%. But it would have slowed since 2014, with growth of 3.1% between then and 2019, and 0.9% between 2020 and 2023, with a forecast for the end of this year of 3.1%.

“In 2024, interannual coefficients of GDP fluctuations are mostly positive, with optimistic forecasts due to the normalization of climatic conditions and an increase in private spending. Sectors such as agriculture, fisheries and related manufacturing are key to this recovery,” Velarde Flores stressed.

As for inflation, then president of the BCSR noted that Peru has the second lowest average annual rate in the region in the last 23 years (3%) and is only below Panama (2%) and surpasses such South American giants as Argentina (27.2%) and Brazil (6.2%) ).

“Fortunately, it stayed very close to the center of the target range between May and November. It is expected to reach 2.3% by the end of 2024, higher than the 2.2% in the June report, due to a slower reversal of supply shocks,” the BCR leader added.

In recent weeks, Velarde has lectured at APEC and CADE. - APEC loan
In recent weeks, Velarde has lectured at APEC and CADE. – APEC loan

The president of the Central Bank of Peru also said that he did not feel political pressure when making decisions in his institution, considering autonomy of the BCR. “Just as I cannot tell the Minister of Economy, ‘increase this tax, increase spending,’ it will not occur to me to pay attention if he tells me to lower the rate,” he stated.

As you know, the head of the Ministry of Finance announced this a few months ago Velarde He should listen to his portfolio’s request to “more actively reduce the real interest rate, which is quite high. this does not help restore the economy at the rate we would like. We need to move the mortgage market more, move the credit market more.”

In addition, Velarde He also talked about the budget deficit, while Peru will also not comply with the rule for this year. “We won’t be able to live with a 4% deficit because the debt is going up, the interest rate, etc. For the last 34 years, we have been characterized by fiscal responsibility, and it is extremely important to maintain this,” he said.

After his speech in president of the BCRPalso received an award from Adex – “Order of Export Merit in recognition of his commitment and contribution to the promotion of Peruvian exports”.

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