Peru Business Forecast Report Q1 2015

Date: December 12, 2014
Pages: 52
US$ 1,195.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: P32381C1D03EN

Download PDF Leaflet

Core Views

The Peruvian economy will expand at lower average rates in the coming years as a decline in metals prices weighs on private investment into mining and results in slower export growth.

However, private consumption and public investment will remain relatively resilient in the coming years due to a rising middle class and an extensive infrastructure project pipeline.

Major Forecast Changes

Real GDP growth fell below our expectations in the first three quarters of 2014, driven by weak exports and investment, prompting us to downgrade our growth forecast. We now project real GDP growth of 3.0% in 2014 and 3.7% in 2015, compared with our previous projections of 3.8% and 4.0% for 2014 and 2015 respectively.
Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook


SWOT Analysis
BMI Political Risk Index
Domestic Politics
PNP Increasingly Vulnerable To 2016 Defeat
Slowing economic growth will continue to weigh on the popularity of Peruvian President Ollanta Humala in the coming months, leaving his centre-left Partido Nacionalista Peruano vulnerable to defeat in the 2016 presidential elections.
  Table: Political Overview
Long-Term Political Outlook
Mining Disputes Main Threat To Stability
Peru's long-term political stability is undermined by key structural risks, most prominently associated with mining and hydrocarbons exploration in the country's Amazon region.


SWOT Analysis
BMI Economic Risk Index
Economic Activity
Economic Growth To Remain Subdued In 2015
Weak metals prices will weigh on investment in Peru in 2015. While loose monetary policy and expansionary fiscal policies will buoy private consumption, it will not be enough to see headline growth return to the robust 5.0%-plus rates seen between 2010 and 2013.
  Table: GDP By Expenditure
Monetary Policy
BCRP To Maintain Loose Monetary Policy In 2015
The Banco Central de Reserva del Peru (BCRP) will keep its reference rate unchanged at 3.50% through 2015. The BCRP's main tool to stimulate lower trending economic growth will continue to be a lowering of the reserves requirement ratio for commercial banks in the coming months.
  Table: Monetary Policy
Fiscal Policy
Budget Surplus To Narrow Further On High Spending
The Peruvian government’s nominal budget surplus will narrow further in 2015, driven primarily by an uptick in public spending. Indeed, slowing economic growth and the declining approval rating of President Ollanta Humala will encourage the government to increase both current and capital spending.
  Table: Fiscal Policy
Balance Of Payments
Weak Trade Dynamics To Keep Current Account Deficit Wide
Unfavourable trade dynamics will keep Peru's current account deficit near its largest levels over the past decade in 2015. An ongoing contraction in mining exports, amid falling industrial metals prices and slowing Chinese demand will be the main driver of another large trade shortfall in 2015. However, a strong reserves position will ensure relative balance of payment stability.
  Table: Current Account
Currency Forecast
PEN: Record Trade Deficit To Drive Depreciation
The Peruvian sol will continue its depreciatory trajectory in the coming quarters, driven by weakening trade dynamics and a strengthening US dollar. Intervention by the Banco Central de Reserva del Peru will curb the magnitude of currency weakness, but the depreciatory direction of the unit will remain in place.
Regional Private Consumption Outlook
No Major Upside In 2015
Real private consumption growth in most of Latin America will trend lower in the next few years, driven by currency weakness and unfavourable labour market dynamics. Mexico and Colombia are the only two major economies in which we expect faster average real private consumption growth over the next three years.
  Table: Brazil – Private Consumption Indicators
  Table: Mexico – Private Consumption Indicators
  Table: Andean – Private Consumption Indicators
  Table: Southern Cone – Pri vate Consumption Indicators
  Table: Central America – Private Consumption Indicators


The Peruvian Economy To 2023
Cooling Growth Ahead
Economic growth in Peru will cool to an average growth rate of 4.6% between 2015 and 2024, as a slowdown in Chinese economic growth dampens metals demand and prices in the short term, while fixed investment and private consumption growth moderate from their recent highs.
  Table: Long-Term Macroeconomic Forecasts


SWOT Analysis
Operational Risk Index
Operational Risk
  Table: Operational Risk
Transport Network
  Table: Latin America – Transport Network Risks
Economic Openness
  Table: Latin America – Economic Openness Risk
  Table: Imports By Product, 2007-2012


Oil & Gas
  Table: Oil Production
  Table: Oil Production
  Table: Gas Production
  Table: Gas Production
  Table: Water Extraction, 2012-2018
  Table: Water Consumption, 2012-2018
Other Key Sectors
  Table: Pharma Sector Key Indicators
  Table: Telecoms Sector Key Indicators
  Table: Infrastructure Sector Key Indicators
  Table: Food and Drink Sector Key Indicators
  Table: Autos Sector Key Indicators
  Table: Freight Key Indicators


Global Outlook
Warning Signs Growing
  Table: Global Assumptions
  Table: Developed States , Real GDP Growt H, %
  Table: Emerging Markets , Real GDP Growth , %
Skip to top

Peru: Country Business Profile 2016 US$ 300.00 Jan, 2016 · 50 pages
Beans Market in Peru: Business Report 2016 US$ 1,160.00 Jan, 2016 · 70 pages
Citrus Fruit Market in Peru: Business Report 2016 US$ 1,160.00 Jan, 2016 · 70 pages

Ask Your Question

Peru Business Forecast Report Q1 2015
Company name*:
Contact person*:
Request invoice
Your enquiry:
Please click on a Check Box below to confirm you are not a robot: