Covid-19 and external shock: Economic impacts and policy options in Peru

Covid-19 and external shock: Economic impacts and policy options in Peru

April 21, 2020

Latin America currently suffers two shocks, independent but related, the impact of the Covid-19 and the shock of commodity prices. Peru is a case in which the strongest impact comes from the epidemic. Peru was the first country in Latin America to react with sanitary and economic measures against the coronavirus. The country is in mandatory quarantine since Monday, March 16. This carries very important challenges for all economic actors. Global and national activity has suffered a sudden stop with direct implications in: (i) the income generating capacity of independent workers, (ii) the jobs of formal and informal workers, (iii) the survival of small, medium and large companies. This note analyzes the situation of Peruvian households facing the pandemic, exploring their vulnerabilities through an analysis of their main source of income generation: work. It also analyzes the situation of the companies that employ the workers under analysis. It presents an overview of what the government's main actions have been so far and offer some recommendations.