1. Market Research
  2. > Materials
  3. > Metals Market Trends
  4. > Peru Business Forecast Report Q4 2014

Peru Business Forecast Report Q4 2014

  • September 2014
  • -
  • Business Monitor International
  • -
  • 45 pages

Core Views
T he 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 H114, coming in at 3.3% year-on-year (y-o-y), driven by weak exports and investment, and prompting us to downgrade our growth forecast. We now project real GDP growth of 3.8% in 2014 and 4.0% in 2015, compared with our previous projections of 4.5% and 5.0% for 2014 and 2015 respectively.

T he Peruvian sol has taken a substantial leg lower, in line with poor balance of payments dynamics. We expect this to continue weighing on the currency in the coming months and have revised our average exchange rate forecasts for the next few years to account for greater weakness, forecasting the unit to average PEN2.830/USD in 2014
and PEN2.900/USD in 2015.

Table Of Contents

Peru Business Forecast Report Q4 2014
Executive Summary. 5
Core Views..5
Major Forecast Changes5
Key Risks To Outlook5
Chapter 1: Political Outlook. 7
SWOT Analysis.. 7
BMI Political Risk Ratings 7
Domestic Politics.. 8
Political Divisions To Weigh On Humala's Popularity.8
Now entering his final two years at the helm, Peruvian President Ollanta Humala will continue to face significant political challenges both
from a divided government and a dissatisfied electorate. Despite another shake-up to the president's cabinet, we expect policy direction
to remain broadly unchanged.
Table: Political Overview .8
Long-Term Political Outlook 9
Mining Disputes Main Threat To Stability9
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. Concerted efforts will be needed to address this issue, along with the ongoing problems of
corruption and coca cultivation, if the country is to ward off the increasing threat from populism. Nevertheless, our core scenario is for
the country's ongoing export-led growth to raise living standards, creating a core of middle-class stability that will act as a buffer against
other risks.
Chapter 2: Economic Outlook 13
SWOT Analysis 13
BMI Economic Risk Ratings... 13
Economic Activity .. 14
External Headwinds To Drive Average Growth Lower..14
The Peruvian economy will expand at lower average rates in the coming years as a decline in metals prices weighs on private
investment 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.
table: GDP By Expenditure...14
Fiscal Policy. 16
Uptick In Spending To Narrow Budget Surplus16
Slower economic growth will lead the Peruvian government to adopt moderate expansionary fiscal policies in the coming quarters.
This will drive a narrowing of the country's nominal budget surplus in 2015, though Peru's fiscal position will remain stable in the years
ahead.
Table: Fiscal Policy16
Balance Of Payments . 17
Falling Export Revenues To Hit Current Account..17
Peru's current account deficit will widen over the coming quarters as export revenues remain under pressure from adverse global
dynamics while import demand remains elevated. The shortfall will expand to 5.9% of GDP in 2014 and 5.4% in 2015, compared with
5.0% of GDP in 2013.
Table: Current Account...18
Exchange Rate Policy 20
PEN: Weakness Ahead As Trade Rebalancing Pressure Intensifies...20
The Peruvian sol will weaken in the coming quarters as depreciatory pressure stemming from a rapidly widening current account
balance intensifies. The Banco Central de Reserva del Perú will allow the unit to weaken through loose monetary policy in a bid to
rebalance trade as lower average metals prices continue to weigh on exports.
table: Currency Forecast..20
Tab le: Exchan ge Rat e20
Monetary Policy .. 21
BCRP To Keep Loose Monetary Policy Through 2015..21
The Banco Central de Reserva del Perú (BCRP) will keep its policy rate at 3.50% through 2015 following a 25 basis points rate cut on
September 11. Slower economic growth this year will encourage the BCRP to keep low rates for an extended period, though resilient
private consumption growth will keep central bank officials from seeking additional rates cuts in the coming quarters.
Table: Monetary Policy21
Chapter 3: 10-Year Forecast... 23
The Peruvian Economy To 2023 23
Solid Growth Ahead.23
Economic growth in Peru will cool to an average growth rate of 4.7% between 2014 and 2023 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. That said, we believe solid macroeconomic policies, substantial commodity wealth and a growing consumer base will
continue to drive investor interest in Peru over the forecast period.
table: Long-Term Macroeconomic Forecasts23
Chapter 4: Business Environment. 25
SWOT Analysis 25
BMI Business Environment Risk Ratings.. 25
Business Environment Outlook. 26
Institutions... 26
Table: BMI Business And Operation Risk Ratings26
Table: BMI Legal Framework Rating.27
Infrastructure... 28
Table: Labour Force Quality..28
Market Orientation... 29
Table: Trade And Investment Ratings.29
TABLE: LATIN AMERICA - ANUAL FDI INFLOWS.30
Operational Risk.. 31
Chapter 5: Key Sectors.. 33
Telecommunications... 33
tab le: Teleco ms Sector - Mob ile - Histor ica l Data and For ecasts 34
tab le: Teleco ms Sector - Wireline - Histor ica l Data and For ecasts 34
Freight Transport. 35
tab le: Air Freight 37
tab le: Rail Freight ..38
Tab le: Mar itime Freight .38
Other Key Sectors... 41
Tab le: Oil and Gas Sector Key Ind icators ..41
Tab le: Phar ma Sector Key Ind icators 41
Table: Infrastructure Sector Key Indicators...41
Tab le: Food and Drink Sector Key Ind icators ..42
Table: Autos Sector Key Indicators...42
Chapter 6: BMI Global Assumptions. 43
Global Outlook. 43
Eurozone Downgrade On Poor Q214..43
Table: Global Assumptions.43
Tab le: Develop ed Stat es, Real GDP Growt H, %...44
Tab le: BMI VE RSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %. 44
Tab le: Emerging Mark ets , Real GDP Growth , %..45

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Flip-Chip Technologies and Global Markets

Flip-Chip Technologies and Global Markets

  • $ 6 650
  • Industry report
  • July 2016
  • by BCC Research

This BCC Research report discusses factors currently driving and restraining growth in flip chip technology market as well as factors that will have an impact on the future of this industry. Use this report ...

Transparent Conductive Coatings: Technologies and Global Markets

Transparent Conductive Coatings: Technologies and Global Markets

  • $ 6 650
  • Industry report
  • June 2016
  • by BCC Research

This BCC Research report provides an up-to-date analysis of recent developments and current trends in the global market for transparent conductive coating. Forecast provided from 2016 through 2021. Use ...

Worldwide Rechargeable Battery Market 2015-2025 2016 Edition

Worldwide Rechargeable Battery Market 2015-2025 2016 Edition

  • $ 7 375
  • Industry report
  • June 2016
  • by Avicenne Development Reports

Summary 15 Detailed modules: Smartphones, Portable PCs, Tablets, Power Tools, xEV, … Energy Storage Systems & Industrial Applications Market in volume & value Market by application, battery size, battery ...


Download Unlimited Documents from Trusted Public Sources

Copper Statistics

  • September 2016
    5 pages
  • Copper  

View report >

Metals Supply in China

  • September 2016
    2 pages
  • Copper  

    Non-Ferrous Met...  

    Nickel  

  • China  

    Australia  

View report >

Global Iron Ore Statistics, Weekly Update

  • September 2016
    10 pages
  • Iron Ore  

  • Australia  

    World  

    United States  

View report >

Copper Market

2 days ago

ref:plp2014

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.