The COVID-19 Pandemic and the Peruvian Economic Crisis of 2020

Abstract

The COVID-19 pandemic was undoubtedly the most severe supply shock in recent decades, exacerbated in the Peruvian case by the confinement measures adopted by the government to contain the health crisis. This caused a sharp drop in demand, which had an enormous impact on a large part of the population working in the informal sector. As a result, the Gross Domestic Product (GDP) contracted by -11.1% in 2020, causing great social, economic and cultural devastation. For this reason, the objective of this study is to analyze the impact of the SARS-CoV-2 pandemic on the Peruvian economy, reviewing the previous conditions, the public policies adopted and the effects on the main economic variables that determine the growth of the Andean country. To carry out this analysis, the synthetic analytical method was applied, as indicated by De Franco and Solórzano (2020). This methodology involves an in-depth bibliographic review based on books, articles, journals, national and international reports. Among the most outstanding conclusions is the government intervention through fiscal and monetary policies that allowed alleviating the effects of an unprecedented crisis and mitigating the fall of the GDP, showing in the short term signs of an encouraging recovery.