Andina

IMF: Peru's diversification key to achieve sustained GDP growth rate

15:28 | Lima, Jun. 4.

Developing new engines of growth is key for Peru to expand its growth potential, International Monetary Fund (IMF) Mission Chief Ravi Balakrishnan said Monday.

In an interview with El Peruano official gazette, he explained his points of view regarding the Peruvian economy.

Balakrishnan said the IMF has raised its forecast for Peru's potential medium-term growth from 3.8% to 4%. Concerning 2018, its forecast remains unchanged at 3.7% —from the April 2018 World Economic Outlook.

"We had a downward bias, now we believe everything is more balanced. Recent indicators are good, posting a 3.2% rise in the first quarter of 2018, which is important. Plus, April figures give signs of improved confidence and a rebound in economic activity," he said.

Asked about the segments that could boost this recovery, he said non-primary sectors (construction and manufacturing) saw a successful performance thru April, and that public investment will play an important role in the future.

However, the IMF mission chief said not to forget the role of private investment, which has been highly dynamic since the end of last year.

Domestic demand

"I believe consumption will have a good pace, with more investment and greater incomes. There is a strong connection between commodity prices and economic activity, which generates a vicious circle in this regard," Balakrishnan pointed out.

Peruvian economy grew 2.5% in 2017 and registered one of the best performances in the region. In this sense, he said the 2017 figure was low compared to previous years. However, the Andean country maintains a good pace of growth in the region.

According to the IMF, Peru experiences a good performance and expects a pick-up in growth this year.

(END) DOP/MDV/RMB/MVB

Published: 6/4/2018