According to the SBS (Peruvian Banking Supervisory Board may 2022) The Peruvian economy is expected to grow 3.4% in 2022 and 3.2% in 2023. This projection could be revised downwards due the eventual materialization of external and domestic risks such as the Ukraine and Russian war and/or Political unrest in Peru. Independently of previous mentioned risks a prolonged increase in inflation will increase the costs of companies and reduce the purchasing power of peruvian economic agents. Also, higher inflationary expectations could lead to an acceleration in the withdrawal of monetary stimuli, especially in developed countries, and lead to a tightening of global financial conditions, which, now added to local political uncertainty, would increase local financing costs. A special consideration should be taken regarding a potential increase in social conflicts that could have sectoral and investment impacts. In light of the change of subnational authorities that would take place in the last quarter of the year this to could delay the execution of public spending.

However in this context, the Peruvian financial system has continued its recovery, after the impact of the COVID-19 pandemic, which is evidenced by the sustained growth of the loan portfolio and the recovery of profitability. Credits without considering government programs of the financial system experienced a strong contraction during 2020 due to the effects of the pandemic; worth noting these exceeded their pre-pandemic level since July 2021 and as of February 2022 they registered a growth of 5.9% compared to February 2020. In addition, the profitability of the financial system registered an ROEA[1] of 11.7%, being above what was registered in February 2021 (1.1%), although still below pre-pandemic levels (ROEA of 16.2% in February 2020).