Hugo Perea, chief economist at BBVA Research in Peru, said today that Peru will have a record trade surplus this year and next, a forecast supported by rising international prices in 2021 and an increase in exportable goods in 2022.

By 2021, he said, the trade surplus would be about $17 billion. By 2022, the figure will exceed $18 billion due to increased mining production. Perea explains that this year's surplus should cause the exchange rate to fall; However, he says the political situation has put foreign investors on the defensive. "In addition, the dollarisation of private portfolios in Peru has put continued pressure on the exchange rate," he said, introducing a report on the situation in Peru.

Reduce exposure

That, he said, helps reduce Peru's exposure to potential financial turmoil and foreign financing needs in global markets. "In fact, we expect the current account to be in surplus; At the same time, medium - and long-term private debt will fall. Against this backdrop, BBVA expects the exchange rate to trade between 3.90 and 4 sols for the rest of the year. "In this case, there is still a lot of uncertainty. However, if the authorities send a signal of confidence with a coherent policy, the situation will surely be more benign.

The fiscal deficit

In addition to forecasting a record trade surplus, the agency explained that they expect a fiscal deficit of more than 4 per cent of GDP this year and more than 3 per cent in the coming years. "While we expect tax revenues to pick up, we think public spending will slow," he said. As a result, he says, public debt will exceed 40% of GDP.

Regarding recent misinformation about $14 billion of capital fleeing the country, Perea said that although this information has been denied, it is necessary to be careful not to exacerbate the untrue situation.

So he called for accountability. False alarmist news can affect people's expectations. Let's not forget that in macroeconomics, expectations matter.Editor/GongYan