Peru’s economy considered the second most volatile in Latin America


Peru is considered the second most volatile economy of Latin America, according to Gestion.

The Bank of the Republic of Colombia published a study on the volatility of country’s economies in the region, and found Colombia and Chile to be the least.

Researchers Juliana Ávila and Álvaro José together with a team at the Banco de la Republica developed the study and found that among the countries of Latin America, Colombia and Chile have healthier economic cycles, recording less recession periods, among other factors.

The report finds that since 1977, Colombia, at the discretion of the study, only presents a complete cycle and two contractions, which took place in the 1980s and 1990s, the latter being the longest. The debt crisis of 1982 was also identified in Peru and Mexico; while the latter Colombian crisis occurred between 1998 and 1999 coincided with a recession that occurred in all analyzed except the Mexican economies. However, all economies in the sample except the Colombian exhibit a phase of recession triggered by the sub-prime crisis, ie between 2008 and 2009.

Considering the criteria the study employed, the most volatile were Venezuela, Peru, and Mexico. Still, considering Peru’s volatility, it recorded as one of Colombia’s most consistent trading partners.

According to information published by Comtrade the most important Latin American trading partners of Colombia since 1980 are Venezuela, Chile, Peru and Mexico.

The study acknowledges that Peru and Chile have stronger ties and free trade agreements with Colombia and that they show no sign of deteriorating, according to Gestion. Differing projections of the future of the Peruvian economy define the volatile environment.