An incomes pact is necessary, though difficult to implement. It is essential that the Government should broker a wide-ranging social agreement that helps control inflation, protects the most vulnerable and is as inclusive and transparent as possible, to ensure we do not lose competitiveness and to prevent social discontent.
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Peru is one of the hardest hit countries by COVID in Latin America, with the second highest number of cases per million and near the top in mortality as well. We estimate that the contagion rate has been declining in recent days, but need to wait and see if the trend consolidates given the reopening of the economy.
The effectiveness of the measures will depend on monetary policy taking a more relaxed stance and a significant fiscal boost being realized, complemented by a program of guarantees for development banking.