Peruvian gross domestic product (GDP) growth may reach 4% in the last quarter of 2017 and go further up in 2018 thanks to the positive international context, Central Reserve Bank (BCR) Director Elmer Cuba projected on Monday.
In an interview with El Peruano official gazette, Cuba anticipated a turning point starting in July this year, followed by a gradual improvement.
"It will be rather slow, but we are already moving ahead. The fourth quarter should be the best of the year, with growth exceeding 3.5% —possibly 4%— between October and December," the BCR official forecast.
Such rebound would gain further momentum in 2018 underpinned by "a better international environment: Chinese economy remains strong, the U.S. is growing and commodity prices are high again."
Public investment
On the other hand, Cuba noted public investment —while relevant— is not enough to drive an economic rebound for long. Instead, he pointed to the need to boost
private investments.
"Public investment is a quarter of
private investment, and government current expenditure in goods and services is one tenth of household consumption," he explained.
"We need to wait for families to spend again. However, private investment will be basically the driver for employment generation."
While acknowledging Peru's positive sovereign risk rating and low inflation, the BCR representative warned this is "not enough."
Lastly, Cuba said the Inca country needs to focus primarily on reducing State weaknesses and boosting productivity.
(END) DOP/CNA/DHT/MVB