Amidst Peru’s second-worst recession in over three decades, the country’s top economic officials are engaged in a public dispute over the state of the economy. Central bank President Julio Velarde recently took a jab at Finance Minister Jose Arista during a mining event, accusing finance ministers of being hesitant to criticize or prevent certain initiatives for fear of losing their jobs to Congress.
President Dina Boluarte, who has been in power since December 2022 without congressional representation, is facing challenges such as corruption scandals and massive protests. Despite these challenges, Arista has called for more proactive measures to reduce interest rates, despite Velarde’s rate cuts from 7.75% to 5.75%. Arista believes that further rate cuts are necessary to kickstart the economy. On the other hand, Velarde, hailed for effectively managing inflation, has faced criticism in the past for his economic projections and is now forecasting a continued slowdown in inflation for the year.
The ongoing dispute between Velarde and Arista highlights the challenges Peru faces in economic recovery and the diverging views on how to address them. The public spat between these two key officials underscores the complexity of Peru’s economic situation and the diverse perspectives on how to navigate it.
