Moody's: Greater boost to public investment might enable Peru GDP to rise 3% in 2019

15:29 | Lima, Sep. 16.

A greater boost to public investment in the upcoming months might enable Peru to reach the 3% economic growth rate projected for 2019, Moody's Investors Service Vice-President Jaime Reusche said on Monday.

In the first half of the current year, the Inca country's GDP registered a 1.7% increase. Moreover, the Economy and Finance Ministry (MEF) projected a 3% expansion rate for 2019.

In this sense, Reusche pointed out that reaching a 3% GDP rise this year "might help start 2020 with good momentum" ahead of the future political scene.

GDP growth in July

On the other hand, he underlined the 3.3% growth rate registered in July, after posting 0.19% rise in April, a figure that gradually increased in May (0.71%) and June (2.62%).

"Thanks to the (economic) growth's positive result in July, the second half of 2019 should continue pointing towards a growth rate around that level," the Moody's representative said.

Likewise, the officer explained the result of the first half was due to the political noise —which affected non-mining private investment— and a not-so-good performance of the primary sectors, as there was an adverse base effect during the above-mentioned period.

Trade war

Furthermore, he indicated the U.S.-China trade war has not greatly affected Peruvian economy, as domestic demand has been expanding at stable and moderate rates.

Within this framework, domestic demand posted a 4.3% expansion in 2018. Plus, MEF projected it will rise 3.4% in 2019 and 4.3% in 2020.

"If consumption remains resilient, this might help investment forecasts to improve," Reusche added.

(END) MDV/DTK/MVB

Published: 9/16/2019

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Moody's: Greater boost to public investment might enable Peru GDP to rise 3% in 2019

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