(Updates with inflation, fiscal deficit estimates, context)
LIMA, June 18 (Reuters) – Peru’s central bank on Friday maintained its projections for GDP growth at 10.7% in 2021 and 4.5% in 2022, noting that estimates for future output would ride on the policies of the next president of the Andean nation.
Peru held a run-off election for president on June 6, but a razor thin margin between socialist front-runner Pedro Castillo and conservative Keiko Fujimori has slowed the vote count to a trickle. A winner has yet to be confirmed by the electoral body.
The candidates have sharply opposing views, with Castillo promising a socialist swerve and higher taxes on miners, while Fujimori has committed to a business-friendly tact. The plans the eventual winner proposes will dictate the direction of the economy, central bank chief Julio Velarde said.
“We are still making projections with a veil of ignorance regarding the … reaction that the economy will have to the measures that the new government could take,” Velarde said.
The South American nation, the world’s second largest producer of copper, has suffered the world’s deadliest COVID-19 outbreak per capita, and last year posted its worst economic contraction in three decades.
The fiscal deficit is expected to creep upwards to 4.5% of GDP, from 4.4% previously, the bank said, as the government continues to push stimulus to help spur the country’s ailing economy.
The bank also added consumer prices in Peru would rise 3.0% in 2021, and 2.0% in 2022. (Reporting by Marco Aquino, writing by Dave Sherwood, Editing by Nick Zieminski)
