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FocusEconomics: Peru economy to climb more than 4% over next years

LIMA,PERÚ-FEBRERO 24.Centro Financiero, Lima.Foto: ANDINA/Oscar Farje Gomero.

LIMA,PERÚ-FEBRERO 24.Centro Financiero, Lima.Foto: ANDINA/Oscar Farje Gomero.

11:13 | Lima, Oct. 12.

Peru will grow 3.8% this year and more than 4% in the 2017-2020 period, as economic recovery should pick up in light of Parliament-granted legislative powers, FocusEconomics consultancy firm announced on Wednesday.

Local analysts and economists who participated in this month's Latinfocus Consensus Forecast survey expect Peru's GDP to expand 3.8% in 2016, an upward review from their previous 3.7% projection. 

Peruvian economy is later expected to grow 4.2% as of next year and until 2019, and then to slid to 4.1% in 2020.

Nevertheless, FocusEconomics' 2016 forecast is lower than Peru's Economy and Finance Ministry (MEF)'s official estimate of 4%, recorded in the Multiannual Macroeconomic Framework Revised 2017-2019. Said figure matches that of Peru's Central Reserve Bank (BCR). 

The LatinFocus Consensus Forecast panel expects Peru's GDP to grow 4.2% in 2017, maintaining its previous reading. 

While such forecast is lower than MEF's 4.8% and BCR's 4.5% projections for 2017, it tops IMF's 4.1% estimate.

Likewise, the FocusEconomics report expects the 90-day legislative powers granted by Congress to the Executive should speed up economic recovery. 

“However, the government's fiscal space to finance pledged projects remains tight. The Economy and Finance Minister arranged the issue of nearly US$3 billion to increase its reserves,” the survey points out.

The forecasting firm also highlighted President Pedro Pablo Kuczynski's China trip to draw foreign investment and reinforce Peru's relevant economic relations with the Asian Giant. 

Regional leader

Latinfocus placed Peru (with a 4.2% growth forecast) at the forefront of South America's growth in 2017, followed by Bolivia (3.8%), Paraguay (3.4%), Argentina (3.1%), Colombia (2.7%) and Chile (2.2%).

For this year, the firm projects Peru's GPD expansion at 3.8%, second only to Bolivia (3.9%), but higher than Paraguay (3%), Colombia (2.1%) and Chile (1.7%).

Other indicators

Panelists participating in October's LatinFocus Consensus Forecast expect investment to contract 0.6% this year. For 2017, however, they expect it to expand 4.2%.

As for Peruvian inflation, the panel expects it to end 2016 at 2.9%, which is unchanged from last month's survey. The 2017 estimate slids to 2.7%.

Both forecasts are within the Central Reserve Bank's target range (1%-3%).

Regarding exports, panelists consulted estimated them to grow 2.2% in 2016 and 8.6% in 2017.

(END) CNA/JJN/DHT/RMB

Published: 10/12/2016
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