Peruvian Economy

In case anyone's wondering how the economy in Peru is doing...

Maybe we should take an economic lesson from a third world country...

Peru: Years of growth will help to combat crisis
The Associated Press
Published: February 10, 2009

LIMA, Peru: Nearly a decade of growth has given Peru the strength to counteract the global financial crisis and maintain the Andean nation in the upper echelons of global economic growth, with a 5 percent rate this year, Peru's finance minister said Monday.
"Things are going well in Peru; out there it's different," Finance and Economy Minister Luis Carranza told Lima-based RPP radio.

The surpluses Peru has enjoyed over the past three years will allow the government to boost public investment by 52 percent this year to maintain employment, Carranza said.
The boost is part of a $3 billion anti-crisis package the government announced in 2008, aimed at infrastructure and public works.

The finance ministry estimates that the economy grew by 9.4 percent in 2008, the highest growth in the region and one that surpasses even booming China's 9 percent growth rate for the same year. Official figures for Peru will be released this week. The economy, which has been expanding for more than seven years, grew 8.9 percent in 2007.

Peru, which holds $32 billion in U.S. dollar reserves, is currently running a "small" deficit equal to 0.7 percent of its gross domestic product, Carranza said. He said it will be covered with savings from last year.

"We are not excessively increasing the debt, we are using only a part of the surplus from 2008 to finance 2009," Carranza said.

He said the strength of Peru's economy and the boost in public spending will hold growth at 5 percent this year and 6 percent in 2010. The government and the International Monetary Fund had previously projected 6 percent growth in 2009.

Analyst Enrique Alvarez says a 3 percent to 4 percent growth rate is more likely, as Peru's exports, particularly top mineral exports, are hit by the global

financial crisis and an extended recession in the U.S. and other purchasers of Peru's goods.
"The reasonable approach at this time is to expect something lower," said Alvarez, head of research for Latin American financial markets at IDEAglobal in New York.

The U.N.'s Economic Commission for Latin America projects 1.9 percent growth for Latin America as a whole in 2009, while the IMF projects global growth of just 0.5 percent.
Peru is the world's top silver producer and one of the biggest exporters of copper, gold, zinc and fishmeal.

http://www.iht.com/articles/ap/2009/02/10/business/LT-Peru-Economy.php