The International Monetary Fund (IMF) on Friday projected Peru's GDP growth would remain high relative to the region this year thanks to the government's fiscal stimulus and post-disaster reconstruction funds.
IMF thus expects the Inca nation to offset the effects of delayed infrastructure projects —in the wake of the Odebrecht scandal— and "Coastal El Niño" phenomenon disasters, which have "destroyed a significant chunk of the capital stock."
In a concluding statement issued today, IMF forecast the Andean country would grow 2.7% in 2017 due to the said shocks, but highlighted the Economy-Finance Ministry's "rapid" response.
Such reaction includes a (GDP) 1.3% fiscal package for reconstruction needs, initiatives to support affordable housing, as well as better financing conditions for SMEs.
IMF also underscored the Central Reserve Bank's (BCR) reduction of reserve requirements —to support credit conditions— and the 0.25% cut of the policy rate.
Looking ahead
As a result, the multilateral institution projected Peru would overcome current "domestic headwinds," bouncing back in 2018-2019 to its potential 3.75% growth rate.
The Fund also estimated that faster structural reforms —if the authorities' reform program gains greater traction— and higher infrastructure spending could lead to an increase of the said potential growth to 4%-4.5%.
(END) CNA/CNA/DHT/MVB