(Adds quote, details of forecast)
LIMA, June 19 (Reuters) - Peru’s central bank slashed its economic outlook for the country on Friday, estimating annual contraction of 12.5% in 2020, which it said would be the copper-producing nation’s worst decline in a century due to the impact of COVID-19.
The forecast, made in the bank’s delayed quarterly report, was down from a prediction of 2.3% growth for the year made before the global health crisis.
“It is the biggest fall in the last hundred years. Truly dramatic,” central bank President Julio Velarde said at the presentation of the report.
Peru, the world’s No. 2 copper producer, which relies heavily on commodities exports, has been hit hard by the pandemic, with a tough and early lockdown since March stalling mining output. The country has recorded nearly 250,000 confirmed coronavirus cases.
The central bank forecast a sharp rebound in 2021, with predicted growth next year of 11.5%. It deepened its forecast for a fiscal deficit of 9.7% of gross domestic product this year and trimmed the outlook for Peru’s trade surplus to $5.54 billion.
Velarde said inflation this year would be flat, with the possibility of deflation due to dampened domestic demand. Inflation would rise to around 0.5% in 2021, he said. (Reporting by Marco Aquino; Writing by Adam Jourdan; Editing by Leslie Adler)
Our Standards: The Thomson Reuters Trust Principles.