A journalistic story by the Bloomberg Business online site pointed out the measures implemented by the current administration in order to boost economy.
What follows is an article based on the remarks by the story called: Peru Proves Emerging-Market Standout as Bonds Outperform.
“At a time when the collapse of commodity prices is roiling countries from Venezuela to Russia, Peru is showing that it’s one of the few developing nations positioned to weather the plunge,” the Bloomberg Business article stated.
According to the online business site, Peru has been “running budget surpluses” for “three straight years” and “stockpiling $8.6 billion in a rainy-day fund.”
This is added to government policies implemented to: cut taxes, boost government spending and “chop interest rates to shore up economic growth.”
The work conducted by President Ollanta Humala, such as: attracting investments in agriculture- and energy-related projects to lower the economic dependence on mining, is also pointed out by the American business information giant.
Analysts foresee Peru will “post the strongest economic expansion among major Latin American nations this year while boasting the region’s slowest inflation.”
“Peru is one of the better countries in the emerging world,” Jacob Jensen -a money manager at Jyske Invest Fund Management, which holds about $1 billion in developing nation debt- told Bloomberg by telephone from Silkeborg, Denmark.
Currently Peru’s GDP is at US$216 billion. It is expected to grow by 4.8% by the end of the current year, according to calculations of Peru’s Finance Minister, Alonso Segura.
The percentage may double the economic outcome reached in 2014.
Stimulus Plan
“With copper losing almost a quarter of its value over the past year, the 52-year-old Humala plans to boost public spending to 22 percent of gross domestic product in 2015, the most since 1977,” it stated.
Personal and corporate tax rates were lowered. The implementation is part of the US$3.9 billion stimulus measure plan enacted by the Peruvian government last December.
One of those measures is: Boosting infrastructure investments “with plans to award at least US$10 billion of project licenses by mid-2016 after a record US$12 billion of contract last year.”
“Even with the increase, Peru will spend less as a percentage of GDP than any other country in South America, according to the International Monetary Fund,” calculated Bloomberg.
“At 19% of GDP, the country’s gross debt is the third-lowest in the region,” it points out.
“The efforts by the Peruvian Government have won the confidence of the private investment,” said, as quoted by Bloomberg, Alfredo Coutino, director for Latin America at Moody’s Analytics Inc., a unit of Moody’s Corp.
(END) Bloomberg/MVB
Published: 1/29/2015