Peru's economy still weighed down by mining woes -cenbank official

Fri, April 8, 2022

By Carolina Pulice

April 8 (Reuters) - Peru's economy is still being weighed down by protests hitting copper mines including MMG's Las Bambas and Southern Copper Corp's Cuajone, a central bank official said on Friday.

"(Production) problems remain, affecting the evolution of mining GDP," said Adrian Armas, the bank's manager of economic studies.

On Thursday, the central bank raised its benchmark interest rate to 4.5% from 4.0%, citing inflationary pressures.

Armas said the bank expected inflation to start falling from July, reaching its target range of 1%-3% in the second or third quarter of next year.

Peru is the world's No. 2 copper producer and mining is a key source of tax revenue.

The country is facing a wave of protests from indigenous communities that accuse mining firms of not providing enough jobs and money to impoverished locals.

Las Bambas alone accounts for about 1% of gross domestic product and 2% of global copper supply.

While missing out on tax revenues at a time when copper prices are at near-record highs, Peru is also facing high inflation and pressures to subsidize costs that have spiked since the Russian invasion of Ukraine.

It has already waived most taxes on gasoline and food essentials, as well as given vouchers to poor families to buy cooking gas.

(Reporting by Carolina Pulice; editing by John Stonestreet)