International rating agency Fitch Ratings said Peru’s gross domestic product (GDP) will grow by 4% this year in spite of the still low prices of metal in major markets around the world.
“Despite continuing low metal prices, Fitch forecasts economic growth of 4% in 2015 and 5% in 2016, driven by expanded mining production and infrastructure investment, as well as monetary and fiscal policy stimuli,” it explained.
Fitch stated downside risks to our forecast could materialize from a sharp decline in terms of trade, under-execution of capital spending by subnational governments, and weak business confidence.
Inflation
On the other hand, the rating agency indicated that inflation, averaging 3.3% in 2014, is currently on a downward trend and inflation expectations remain anchored within the central bank's inflation target range.
“In spite of PEN depreciation pressures and dollarization, the Central Bank has provided monetary stimulus through interest rate cuts and differentiated FC and LC reserve requirements," reads the report.
Likewise, the Central Bank continues to implement measures to reduce risks from financial dollarization, especially on the credit side.
(END) JCC/JCC/RMB
Published: 3/28/2015