Analysis of the economic context in Peru from COVID-19

Abstract

This essay presents an analysis of the economic situation in Peru in the context of the beginning of the COVID-19 pandemic, given the establishment of a mandatory total quarantine implemented by the government, numerous companies from different sectors had to temporarily suspend their operations, a stage that caused the payment chain to break down and consequently many companies and families did not generate income. Likewise, other companies stopped their production due to a shortage of their imported inputs, described by Camargo (2020). Due to great uncertainty, the main government entities in charge of issuing macroeconomic projections postponed their publications, as argued by Jaramillo and Ñopo (2020). On the other hand, the economy portfolio developed an economic plan allocating billions of soles to provide liquidity to families and companies, as reported by the Ministry of Economy and Finance (2020). Measures that generated a boost to the Gross Domestic Product (GDP) towards the fourth quarter of 2020, as stated by the Central Reserve Bank of Peru (2020), a scenario reflected in the aggregate supply and demand proposed by Varona and Gonzales (2020). Consequently, the pandemic negatively impacts economic agents.