When investors observe political noise, they feel fear about investing in the country.
The bank for investment, JP Morgan, projected that the political uncertainty is harming the economic growth of Peru.
“If this factor were cleared the country would advance towards its potential GDP (between 4% and 5%). Currently, the projection is only 3.5%”, wrote La República.
JP Morgan’s chief executive and investment strategy manager for Latin America, Franco Uccelli, informed that the projection of the market consensus on the country is of 3.5% for this year, due to the better prices of commodities.
Uccelli also explained that Peru should take advantage, to expand its expansion, the expected good performance of the global economy for this year, mainly due to the advances of the United States, China, Japan, Brazil, and other countries.
“When investors observe the political noise, they feel fear about Peru, short-term investments, and consumption decisions, as well as hiring.”, said Uccelli to La República, referring to the current political situation in the country.
Also, he mentioned that the prices of Peruvian government bonds could fall if the political uncertainty increases or continues for a long time.