The decrease in mineral exports that has been hurting growth and investment in Peru, the world’s third largest copper producer, appears to have taken a heavy toll on economic growth, with President Ollanta Humala saying in a radio interview this week that 2014 growth eased to somewhere between 2.6 and 2.7 per cent.
This prediction, if confirmed by official statistics, would mark the Andean country’s slowest GDP growth rate in over five years. It would also represent a sharp slowdown from 2013, when the economy expanded at 5.8 per cent. Read more
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
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 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
Wasn’t the talk in some corners of Lima that the Peruvian economy was already pointing upwards? It seems for policy makers it needed yet another push.
Surprising analysts, the central bank has cut its policy interest rate, which has been fixed at 4.25 per cent a year since June 2011, to 4 per cent. Read more
The times of the rip-roaring annual growth rates of 7 or 8 per cent that Peru has witnessed in recent years might be over but the Andean country is still one of Latin America’s most dynamic economies.
That, at least, is according to its finance minister Luis Miguel Castilla (pictured), who told beyondbrics that the economy will recover to some 6 per cent “or even more” next year – thanks in part to infrastructure spending, a recovery in business confidence, and strong mining investment that is expected to double the country’s copper production by 2016. Read more
One day Ollanta Humala, Peru’s president, is unnerving investors with a hankering for state-run enterprise, the next he is making it easier for miners to push through projects despite community opposition.
According to Reuters, Humala is on the verge of reneging on his key election pledge to give Andean indigenous communities the right to better consultation over mining projects near their homes. Read more
Source: Jockey Plaza
Millionaires might seem like chump change in this age of trillion-dollar deficits and billion-dollar bailouts.
But in Peru, new millionaires are just another indicator of the kind of strong economic growth that prompted the International Monetary Fund to brand the Andean economy shock-resistant. A reverse canary-down-the-mine, if you will. Read more
The golden pre-Incan and Incan relics on display at the lobby of the Banco Central de la Reserva del Peru, the central bank, seem like good imagery of abundance for an economy that is currently one of the region’s darlings.
“We are doing very well,” Julio Velarde, Peru’s central bank chief, told beyondbrics in his windowless office, with mahogany-covered walls. Read more
Like many emerging markets, Peru has been fighting a war – a currency war to be precise.
The country’s currency, the sol, jumped to a 15 year high last week after the US Federal Reserve said it would launch a third round of quantitative easing. And it looks like Lima has decided enough was enough.
The Andean country’s central bank changed its intervention strategy on Friday to increase volatility in the currency. Read more
Unity makes strength. That, at least, appears to be the logic behind Cemento Andino’s move to merge into Peru’s biggest cement maker, Cementos Lima, to create the strongest player in the local market, the Andean Cement Union.
The merger is timely. The new company will create the scale needed to fend off competition from Mexico’s cement titan, Cemex, which is already importing and building a greenfield plant in Peru. Read more
Will Peru have to start taking advantage of its international reserves and counter-cycle fund sometime in the not-so-very-distant future?
A gloomy April suggests yes. The world’s second biggest silver, copper and zinc producer and sixth biggest gold producer has logged its first monthly trade deficit since April 2008, as well as a steep drop in gold production. Read more
Has Peru replaced Brazil as Latin America’s currency warrior?
Less than two months after it said it would not impose capital controls to stem the rise of its currency against the US dollar, Peru has gone ahead and done just that.
On Monday, the Andean country said it was raising deposit requirements on bank accounts to curb credit expansion and weaken the sol. Read more