Peru Heading for 5%-Plus Growth as Economy Picks Up, Segura Saysby and
Investment rebound after election seen adding to mining boost
Minister sees MSCI keeping Peru in emerging market category
Peru will resume robust growth this year and next as rising copper production and a post-electoral investment rebound bolster the economic recovery, said Finance Minister Alonso Segura.
South America’s sixth-largest economy will grow as much as 4 percent this year and 5 percent or more in 2017, Segura said Friday in an interview in Davos. Gross domestic product probably rose 2.9 percent to 3 percent last year, he said.
Economic growth is accelerating as new mines offset a drop in export revenue. MMG Ltd this month made the first shipment from its Las Bambas copper mine, which is poised to become one of the world’s biggest. At the same time, businesses are waiting for the result of Peru’s presidential election in April, creating pent up investment that will be “unleashed” after the vote, Segura said.
“It’s an electoral year and we have lots of headwinds,” Segura said. Peru can grow 5% in 2017 “without any difficulty.”
Peru’s central bank raised its benchmark lending rate for a second consecutive month last week citing stronger growth in the last quarter of 2015 and above-target inflation.
The global slump in commodity and equity markets this month isn’t helping Peru in its drive to increase liquidity in its equity market, Segura said.
MSCI Inc. has said it may demote the Andean nation to frontier market status from the emerging market basket after a May review. Segura said he was confident Peru will keep its status as a result of the measures the government and stock exchange took last year to boost trading volumes.