BMI View: Due to major infrastructure delays and extensive flooding weighing heavily on H1 economicactivity in Peru in 2017, as well as lower commodities demand from China, road and rail freight will seecontractions in growth over the short term, although we expect a rebound to occur at least in terms of theformer in 2018. Rail will struggle owing to its reliance on the mining sector; copper prices remain subduedby historical standards and operational challenges facing miners, such as flooding and strikes, posetemporary disruptions to output.
Key Updates And Forecasts
In terms of the domestic picture, growth in Peru will accelerate rapidly in the coming quarters, with realgrowth in 2018 expected to bounce back from a sluggish 2017 - good news for freighters as consumersbegin to enjoy deeper pockets. While major infrastructure delays and rampant flooding weighed heavilyon H1 economic activity, we expect government stimulus efforts to drive a recovery in H2. Industrialactivity, particularly manufacturing, will contribute to growth acceleration, along with higher privateconsumption and continued mining strength. We maintain our view for 2.8% and 4.3% real GDP growthin 2017 and 2018 respectively, from 3.9% in 2016.
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