After three years in the red (2013-2015), Peru's Macroeconomic Performance Index (IPM) has rebounded from -3.4 in 2015 to 1.1 at the end of 2016, Lima Chamber of Commerce (CCL) reported.
"This result was driven by Peru's 3.8% growth in 2016 and a narrowing balance of payments' current account deficit, down from 4.8% (2015) to 3.2% of GDP (end-2016)," CCL Institute of Economics and Business Development (IEDEP) Executive Director Cesar Peñaranda explained.
Prepared annually by CCL-IEDEP, the IPM economic indicator measures the responsible management of fiscal, monetary and exchange rate policies to guarantee macroeconomic stability.
IPM calculation is determined by five variables: GDP growth, inflation, fiscal deficit fluctuations, current account deficit and unemployment.
"A higher IPM entails achieving high growth rates, generating more productive employment and reducing poverty and inequality," the CCL-IEDEP head pointed out.
Such result earned Peru the fifth spot in Latin America and the second in South America, only behind Paraguay (2.5).
This decade, IPM has seen a steady decline from 6.5 in 2010, even plummeting into negative figures: -0.7 (2013), -0.1 (2014) and -3.4 (2015), before bouncing back to 1.1 in 2016.
Said decline was caused by Peru's inflation, which has remained above its three-percent target in the last three years. Low GDP growth as at 2014 and a growing fiscal deficit in 2013-2016 also contributed to the macroeconomic fall.
"We see a volatile current account balance and an unchanging unemployment rate over the last two years," Peñaranda noted.
Latin America IPM
Only 6 out of the 17 Latin American countries analyzed posted positive IPM: Panama (5.1), El Salvador (3.2), Costa Rica (2.7), Paraguay (2.5), Peru (1.1) and Mexico (0.4).
However, most Latam nations —such as Brazil, Argentina and Venezuela— evidenced negative results. Such situation is particularly alarming in Maduro's country, with a 10% GDP drop, 720%-ish inflation, 25.7% fiscal deficit and unemployment projected at 18.1% of EAP.
Peru's macroeconomic figures thus stand out in a region marked by falling fiscal balances, where 12 countries posted further negative results, 4 recorded GDP drops and 10 saw growing unemployment rates.
(END) MDV/MDV/DHT/MVB