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Peru Business Forecast Report Q4 2012

714.72

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Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£714.72

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GBP EURO USD

Market

All Sectors

Report Type

Country Guide

Country

Peru

Published

24 October 2012

Number of Pages

49

Report Delivery

Download

Delivery Lead Time

Immediate

Publisher

Business Monitor International

File Format

PDF

A growing consumer base and robust mining and infrastructure project pipelines inform our view that Peruvian growth will be among the strongest in Latin America over the medium term. Domestic demand will become an increasingly important driver of growth in the coming years. As such, we believe the telecoms, utilities and financials sectors have significant long-term growth potential. We expect President Ollanta Humalas administration to increase social spending over the coming years, leading to moderate nominal fiscal deficits. That said, our medium-term revenue outlook remains relatively bright on the back of rising exports and a growing consumer base.

Major Forecast Changes

Following strong economic data in the year to date, as well as indications that private consumption and fixed investment will bolster economic activity more than we had previously expected in the next few years, we have revised up our 2012 and 2013 growth forecasts for Peru. We now forecast real GDP growth of 5.6% (from 4.8%) in 2012 and 5.2% (from 4.8%) in 2013.

Given a sharp deterioration in trade data in recent months, due in part to slowing economic growth in China, we have substantially revised our current account forecasts for Peru to reflect wider deficits in 2012 and 2013. We forecast Perus current account deficit to come in at 2.8% of GDP in 2012 (from 1.7% previously) and 3.2% in 2013 (1.5%). Although we expect the countrys financial account surplus to remain off its recent highs for the foreseeable future, we believe it will comfortably offset the current account shortfall.

While we maintain our view for Perus central bank to hold the policy rate at 4.25% for the remainder of 2012, we are now calling for 25 basis points of cuts in 2013. This is underpinned by our view for slower economic growth in Peru next year, due in part to the continued deceleration of Chinas economy, as well as more moderate inflation. As such, we believe Perus central bank will be encouraged to step in to provide stimulus to the domestic economy next year.

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Select License Type

Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£714.72

Change Currency

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USD

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