PERU IN THE CONTEXT OF COVID-19

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The Peruvian economy, which is the seventh biggest in Latin America, has encountered an underlying change in the previous thirty years. At present, the administration area is the primary supporter of the nation's GDP, with almost 60% of GDP originating from this area. Media communications and monetary administrations are the principal parts of the administration's area; together they represent almost 40% of GDP. Notwithstanding, the nation actually has far to go toward the modernization and seriousness of its administrative areas. Industry, which addresses around 35% of GDP, has gone through an interaction of modernization, which has converted into expanded work in the country's essential mechanical territories. -- Source from: Economy And Geopolitics. (2021). The Economy of Peru - Latest Economic Analysis for Peru - Future of Peru Economy [YouTube Video]. Retrieved from https://www.youtube.com/watch?v=qQfMsGq6MtE

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With the arrival of Covid-19 and the declaration of the World Health Organization that turned it into a global pandemic; industries and States around the world, even Peru, have been economically and socially affected in many ways —negative in most of the cases—. And, as it is still on-going, this blog is carried out to present and explain the main issues ingrained by the pandemic. We will take and treat concepts within the national situation and Coronavirus affection towards society and economic development.

As one of the several main problems of country and the whole world were facing through this special phase, we find tourism. Since Peru is a special country because of its touristic destinations (like Machu Picchu, Cusco) or for its gastronomy; ever since the authorities have decided to not allow people to travel freely for their safety due to the effects of the pandemic the number of tourists has decreased dramatically, hence worsening the economics of tourism in the country. For Peru, this industry is considered one of the principal economic activities, which generates many working opportunities for people within all its departments. In 2019, it was considered as the third source of foreign currency for the country and it was one of the fastest growing sectors until then.

Also, the impact on unemployment was, in fact, notorious, mainly at the beginning of the 2020, in which most economic activities were suspended. So that, in the second quarter of the year approximately 6 million jobs were lost in the country, a fact no less; however, the effect on employment has been differentiated according to the characteristics of the workers; the ones with independent jobs and those who worked in companies with less than 10 employees had been the most affected by not having a job supported by the government. Therefore, it was much more difficult for them to face the pandemic. As for the other workers who were active in larger companies, it has also been detrimental but not as much as for the other group, still unemployment increased by 60% for this category.

At the same time, throughout the Covid-19 pandemic, many problems have emerged for companies and franchises. Regarding changes presented across the pandemic, we found a smaller number of operating franchises than before. These franchises had to adapt to the situation in order to keep working and maintaining themselves, incorporating drastic methods like reducing staff, changing the way to attend to customers, and adopting better ways to maintain a clean presence. In addition to the above, while a small group of companies that lead the main economic sectors 817 of the 10,000 most representative companies in Peru have been increasing during the pandemic as Plaza Vea, Inkafarma, Alicorp and Gloria increased their sales. Other companies that increased through time are also the miner, hydrocarbons and construction ones; but the companies who have gotten even better results are the ones belonging to the food industry, trade and agro-export.