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Thursday, September 25, 2014

Peru Economy to Grow Less Than Forecast 3.5%: Velarde

Peru’s economy will expand less than policy makers forecast this year, central bank President Julio Velarde said, after falling metal prices hurt investment.

The economy will grow close to 3.5 percent, down from the 4 percent to 4.2 percent forecast by the central bank and government, respectively, Velarde said at an event in New York today. “The performance of the primary sectors has not been impressive,” Velarde said.

“The recent slowdown indicates that growth will be closer to 3.5 percent.”

President Ollanta Humala told Bloomberg’s Latin America Forum in New York this week that the government is drafting a plan to “re-activate” growth, including streamlining permits for businesses to operate and increased spending on infrastructure.

“We had some problems in the first half of the year, but the hard moment has passed,” Humala said in a separate interview with Bloomberg Television on Sept. 22. “We are re-inflating the economy to regain the five-percent growth.”

The government said in July it will tap a budget surplus to increase spending by the equivalent of 1.6 percent of gross domestic product to revive South America’s fastest growing economy of the last decade. The central bank cut its overnight rate on Sept. 11 for the third time in a year to 3.5 percent.

bloomberg.com

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