Flat GDP forecast for Peru’s hydrocarbons sector

Peru’s latest political and social unrest has increased uncertainty for the oil and natural gas industry, which has been struggling to overcome an already unfavorable operating environment.

In its latest inflation report, the central bank forecasts GDP for the hydrocarbons sector next year and in 2024 of 4.7% and 4.9%.

Meanwhile, sector growth guidance for this year was cut to 4.7% from 8% due to maintenance and faults at gas processing facilities, although the monetary authority highlights that crude and gas output is expected to “normalize.”

The occupation of infrastructure by protesters amid conflict over the ousting of former president Pedro Castillo, such as gas transporter TGP’s Kámani compression plant, may, however, further impact sector GDP.

The bank projects that Peru’s overall annual GDP in 2022-24 will be 2.9%-3%, flat from previous estimates.

For their part, Banco de Crédito del Perú and the UN Economic Commission for Latin America and the Caribbean expect the local economy will grow 2%-2.5% and 2.2%, respectively. 

“By almost any metric, 2023 is shaping up to be an especially challenging year,” Diego Macera, head of think tank Instituto Peruano de Economía, said in a statement.

But “if the process of bringing forward the elections is properly channeled and President Boluarte maintains the responsible course suggested by her choice of cabinet, the country could enjoy approximately a year and a half of relative stability, at least until the next change of command.”