In a statement, the IMF indicated that Peru's pre-pandemic COVID-19 poverty rate in 2019 stood at 20.2 percent, adding that "poverty increased significantly in 2020 and remained above pre-pandemic levels despite some improvement in 2021".
The agency said that the country's strong policy response in 2020 contributed to easing the pandemic's negative impact while creating the necessary conditions for an early recovery. In this regard, IMF said that Peruvian economic activity picked up strongly in 2021, following its most significant drop in decades.
"Progress in the vaccination campaign allowed a gradual lifting of COVID-19 mobility restrictions", the entity said, noting that "real GDP surpassed its pre-pandemic level but remains below its pre-pandemic trend. Labor force participation and total employment haven't fully recovered".
IMF growth projections for 2022 in Latin America & the Caribbean:
The IMF estimates that economic growth for this year would be 3 percent but says that Peruvian GDP expansion could be affected amid the current world scenario full of geopolitical tensions that tighten global financial conditions and affect global supply chains.
Along these lines, the organization said that the risks are new outbreaks of COVID-19 at the national level, which could lead to the reactivation of containment measures. At the same time, private investment could be held back by political uncertainty and social unrest.
The agency also referred to inflationary pressures, warning that they risk becoming more persistent and requiring a faster tightening of monetary policy. "Faster progress in containing the pandemic, both domestically and internationally, and an easing of policy uncertainty could produce positive surprises," the IMF said.