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Great Article in The Economist: Preparing For Tougher Times; Credit Suisse Conservative 4.5 Percent GDP Growth in Peru

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economist_logoThis is the title of a great article in today’s Economist print and online issues that provides an economic overview and outlook of Latin American countries, including Peru, and puts the region’s economy in perspective as it rides the U.S. and global economic crisis. The article begins saying:

In the five years from 2004 Latin America’s economies grew at an annual average rate of over 5%, inflation remained generally low, credit expanded and exports boomed. All this meant that the proportion of people living in poverty fell from 44% in 2002 to 33% this year, according to an estimate this week by the United Nations Economic Commission for Latin America and the Caribbean. Now the task facing the region’s policymakers is to limit the damage as the world economy deflates.

Highlights include:

  • GDP estimates in 2009: Brazil 4%, Mexico 0.4%. And as mentioned in my earlier post, Peru is expecting to grow at least 6% according to government estimates.
  • The two main factors contributing to Latin America’s downturn are: a) Continuing steep fall in commodity prices because of worries that China’s economy is stalling. Commodities, from Venezuelan oil to Peruvian minerals, Argentine soya and Brazilian iron ore and orange juice, make up a big chunk of the region’s exports;  and b) Banks in Latin America have turned cautious. Many foreign banks are cancelling credit lines to the region, or renewing them for shorter periods or at higher rates.

Additionally, Credit Suisse just released a report for Latin America, where Peru is slated to show the highest growth in the region, although takes a conservative 4.5% GDP growth, as Bloomberg reports.

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Written by Catherine Castro

December 11, 2008 at 12:15 pm

Peru Announces $13 Billion Stimulus Package To Ride US Economic Crisis Strongly

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I don’t typically write about economic-related news but more on fun and useful information about Peru. But I think it is worth mentioning how Peru is actually riding the US economic crisis.

As I mentioned in my November post, Peru is one of the few countries in Latin America that will be able to ride the crisis better than others with estimates of 9 percent in 2008 and 6.5 percent in 2009. In fact, the first statistics showing a downturn include:

  • Copper and minerals prices are tumbling, thus exports fell in October for the first time in more than six years and down 11.4 percent from the same month last year.
  • In September, Peru registered a trade deficit for the first time in more than five years, followed by a US$ 506 million shortfall in October.

As a result, the Peruvian government today announced a US$ 13 billion stimulus package for housing, highways and other projects in 2009, as Reuters reports today.

Written by Catherine Castro

December 8, 2008 at 12:41 am