As Peru’s economy struggles to regain its former ebullience, the government has again stepped in, this time with a stimulus package worth an estimated $4bn next year or about 2 per cent of gross domestic product. Much of the money comes in tax breaks but the package also includes about $1bn in bond issuance to help pay for government investment, poverty relief and job creation.
The package of measures – the fourth to be announced this year, and still subject to final approval in Congress – was unveiled last week by Alonso Segura, finance minister, just two months after he replaced the widely-respected Luis Miguel Castilla, who resigned unexpectedly in September. Read more
If you own a small business in Peru and you want a loan, one option is to go to a bank and fill out an application. There is a strong likelihood, however, that it will come back with “rejected” stamped across it in big block letters.
Now, however, an alternative is being tested out that greatly improves your chances of success. Severino Risco, a 50-year old fish seller in Lima, is one of its beneficiaries. Read more
Peru’s elections of mayors and regional governors on Sunday were a strange sight.
In Lima, the capital, the second place finisher – 30 points behind the winner – was feted like a victor. Meanwhile the anti-mining regional governor of mineral-rich Cajamarca – with the highest total out of 25 races – had little to celebrate. Read more
In less than 24 hours Peru’s economy – once feted as Latin America’s star and now struggling with a slowdown – suffered two blows. First, on Sunday evening, the surprising loss of its respected finance minister, Luis Miguel Castilla. Then, on Monday morning, the announcement that the Andean country’s gross domestic product grew below expectations in July.
Peru’s national statistics institute said the economy accelerated a meagre 1.16 per cent from the same month last year. This still means 60 months of continuous growth and an improvement from June, when Peru’s GDP growth nearly came to a halt, expanding just 0.3 per cent compared with a year earlier. Read more
There are two known unknowns when looking at South America’s economies: China, and everything else. Over the past decade, the Chinese-driven commodity price boom indiscriminately lifted the region’s commodity economies, however well or badly they were managed. But now that the boom is over, the “everything else” category is starting to bite. That is true of Argentina, Brazil, Chile and Venezuela– all of which, to a greater or lesser degree, are now suffering the political ructions that slower growth produces. It is also true of Peru, long the continent’s economic star. Over the weekend, Luis Miguel Castilla, the country’s respected finance minister (pictured), unexpectedly resigned from his post. Read more
Peru’s economy is in the spotlight, going through its worst time since the global financial crisis. But Julio Velarde, Peru’s central bank chief, told beyondbrics on his way to the annual meeting of financial policymakers at Jackson Hole in the United States that this is simply, “a rough patch.”
Maybe more like a pothole, some may say, as the economy expanded just 0.3 per cent in June compared with a year earlier. Growth in Peru’s economy, once feted as a star inSouth America, slowed to 3.3 per cent in the first half of 2014.
A drop in investments and tumbling earnings from mineral exports caused by weaker prices and softer demand from Asia took a heavy toll. Lower mining output in the world’s third largest copper producer was also caused by issues at large mines. Read more
The revolving doors of Peru’s cabinet are spinning out of control. Ollanta Humala, the president, this week named his sixth cabinet chief in less than three years, complicating an already difficult stretch for the government. Read more
Is one of Latin America’s stars losing some of its shine? Amid worsening terms of trade and expected weaker output in mining and fisheries, Peru’s central bank appears to think so, at least for now.
In its latest quarterly report, the BCRP cut its outlook for GDP growth this year to 4.4 per cent from its previous estimate of 5.5 per cent. Next year’s outlook was also revised downwards, to 6 per cent from 6.7 per cent. Read more
By Samuel George of the Bertelsmann Foundation
When the presidents of Chile, Colombia, Mexico and Peru meet on June 19 and 20 for the ninth Pacific Alliance summit in Nayarit, Mexico, they’ll likely debate a proposal that could transform their quietly successful pact while boosting Latin American unity.
At the urging of Chile’s Michelle Bachelet, the gathering is expected to broach the potential integration of the Alliance, which was formed among the four countries in 2012, and Mercosur, an older grouping that includes the regional heavyweights of Brazil and Argentina. The issue would represent a crossroads for the Alliance, however, since Mercosur does not generally share the enthusiasm for international trade shown by its neighbours on the Pacific coast. Read more
Carlos Slim, Mexico’s telecoms tycoon, is both highly strategic and highly pragmatic.
Already fuming over his country’s telecoms reform, which is set to force him to offer free interconnection under new asymmetric rules, he now faces a former friend – AT&T – turning competitor as it buys DirecTV. Read more
The Pacific Alliance is all the rage in Latin America. As today’s FT special report shows, the members of this newly-formed free trade pact include some of the region’s best-managed and most reform-minded economies: Chile, Colombia, Mexico and Peru. These countries do not represent some kind of Platonic ideal. They suffer problems aplenty. But their governments do pride themselves on hard-nosed business dealing rather than gassy ideology. That being the case, is there a way for portfolio investors to actually trade the idea? Read more
By Lucien Chauvin and Andres Schipani
Ollanta Humala, Peru’s president, is in a tough spot. The country faces its most serious constitutional crisis in more than a decade on Monday, if lawmakers reject his cabinet in a vote of no confidence.
The crisis revolves not around government policy or the performance of Humala’s cabinet, but around the role of his wife, First Lady Nadine Heredia. Read more
Those times of stellar annual growth rates of 6, 7 or 8 per cent that Peru experienced in recent years may be gone, and the country might now be dealing with a current account deficit.
But the Andean nation still has quite a vibrant economy, which in 2013 expanded by 5 per cent, the national statistics agency said on Friday. Read more