An increase in mineral prices will encourage more investment in Peru, not only in mining but in other sectors, thus reinvigorating the nation's economy, said Alberto Rodriguez, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela.
In an interview with the official gazette El Peruano
, Rodriguez affirmed human capital formation is key to making a more efficient use of such environment.
When asked about the country's economic performance and strengths, he said Peru's GDP growth rates
are still among the highest in the region, and its economic slowdown over the last years has been milder than most countries in Latin America.
On the monetary side, the country controlled inflation, he said. Besides, exchange rates were narrowed down and international reserves were maintained at a high level as well.
On the fiscal side, windfall profits saved from previous years have helped implement countercyclical policies.
Peru has other strengths, he continued, including its commitment to trade openness, its prudence to regulate institutions and markets, as well as its attractive environment for foreign investment.
According to the WBG official, private investment will rebound
strongly thanks to a rise in the price of copper
and other export metals, which bodes well for the economy.
This is favorable for Peru, whose main growth engine over the past two decades has been private investment
As in the past, mining investment will stimulate the economy, thus boosting investment in other sectors.
Moreover, the Government will have the chance to gradually withdraw fiscal stimulus as growth is in its potential level or even higher.