Andina

FocusEconomics: Peru's GDP to grow 3.9% in 2018

COP20 Centro Financiero Lima San Isidro Surco

COP20 Centro Financiero Lima San Isidro Surco

00:03 | Lima, Dec. 12.

Peruvian economy will expand 3.9% next year, according to the latest FocusEconomics' Consensus Forecast LatinFocus December report released.

This rate is similar to the one projected by the same organization last month. 

"Our panel sees GDP expanding 3.9% in 2018, unchanged from last month's forecast, and 3.8% in 2019," it noted.

According to FocusEconomics' analysts, growth should speed up in 2018, supported by strong global demand for minerals and a ramp-up in infrastructure spending. 

Moreover, private consumption should strengthen thanks to employment and wage gains.

Outlook Stable

The Andean nation's GDP growth gained steam in the third quarter of 2017, underpinned by stronger domestic demand, especially a turnaround in fixed investment. 

Public investment rebounded significantly as key infrastructure projects restarted, following disruptions in H1 due to the Coastal El Niño phenomenon and the Odebrecht corruption scandal

Consequently, the fiscal deficit widened in Q3 to 4.6% of GDP, well above 1.4% in Q2.

Higher commodity prices boosted private investment in the mining and hydrocarbon industries, which also benefited from a significant increase in long-term foreign investment inflows. 

The current account deficit shrunk in the same quarter, on the back of higher volumes and prices of mining exports

Monthly data suggest momentum has carried over into the last quarter of the year: In October business confidence rose significantly, credit growth accelerated and mining investment grew robustly.

(END) NDP/RMB/MVB

Published: 12/12/2017