Peru's (A3 stable) corporate sector will rejuvenate in 2018-19 as the country's economy grows by roughly 3.5%, and private consumption picks up by about 3.6%, following a rough patch based on commodity prices, disruptive weather, and an unexpected political transition, Moody's Investors Service has projected.
According to Moody's, growth has also been supported by a broad-based recovery in
commodity prices that started in late 2016 and has continued through 2018.
Meanwhile, the construction sector has rebounded and grown sustainably amid surging economic growth since mid-2018, it added.
Although there are risks of projects being delayed or canceled, the pipeline for
main private projects through 2019 is sizable at around US$19 billion.
"Like most Latin American economies, Peru's growth has decelerated since 2014, and the economy expanded by only
2.5% in 2017, a steep drop from its 4.0% pace in 2016," the institution stated.
For all of these problems, Peru still remained among the most stable economies in the region, with an average annual 3.0% real GDP growth, stable inflation, and a strong local currency.
"Most experts have improved or at least hinted at rising growth forecasts for 2018-19 to reflect an acceleration in domestic demand and investment. But since recent performance also considers a base effect, we remain more cautious, and maintain our 3.5% GDP growth forecast through 2019," Moody's indicated.
(END) NDP/DTK/MVB