Peru Country Risk Report Q3 2018
Economic activity in Peru will strengthen over the coming quarters, driven by investment and production gains in the mining sector and fiscal and monetary stimulus.
We forecast real growth will accelerate to 3.9% in 2018 and 3.8% in 2019, from 2.5% in 2017.
The government will increase public spending in an effort to boost growth, with reconstruction and other capital expenditures on infra-structure to be the focus.
Fiscal stimulus efforts will be supported by dovish monetary policy as low inflation allows the BCRP to maintain an accommodative monetary policy through end-2018.
President Martin Vizcarra will likely see out the remainder of former President Pedro Pablo Kuczynski's term through 2021. We do not expect a shift away from current bussiness-friendly policies under the new administration.
Executive Summary Core Views Major Forecast Changes Key Risks Chapter 1: Economic Outlook SWOT Analysis BMI Economic Risk Index Economic Growth Outlook Economy To Pick Up Despite Heightened Political Risk Economic Growth Outlook II Mining Investment And Fiscal Stimulus To Bolster Growth External Trade And Investment Outlook Mining Exports To Narrow Current Account Deficit Outlook On External Position TABLE: TOP FIVE GOODS EXPORTS IN 2016TABLE: TOP FIVE GOODS IMPORTS IN 2016 Monetary Policy Framework Structural Fiscal Position TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES Currency Forecast PEN: Copper Will Drive Modest Upside TABLE: CURRENCY FORECAST Chapter 2: 10-Year Forecast The Peruvian Economy To 2027 Robust Growth Over Next Decade TABLE: PRIVATE CONSUMPTION KEY TO GROWTH OUTLOOK Chapter 3: Political Outlook SWOT Analysis BMI Political Risk Index Domestic PoliticsVizcarra Begins Tenuous Presidency TABLE: POLITICAL OVERVIEW Long-Term Political Outlook Regional Tensions The Main Threat To Stability Chapter 4: Operational Risk Operational Risk TABLE: OPERATIONAL RISK Business Crime TABLE: BUSINESS RESPONSE TO WHITE COLLAR CRIME AND ORGANISED CRIME Education TABLE: PERU AND OECD AVERAGE – STUDENT PERFORMANCE SCORES (2015) Chapter 5: BMI Global Macro Outlook Key Divergences Emerging In World Economy TABLE: GLOBAL MACROECONOMIC FORECASTS TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y TABLE: PERU – MACROECONOMIC DATA AND FORECASTS