Boston, MA -- (ReleaseWire) -- 07/03/2014 -- Core Views:
- While we expect real GDP growth to level off at around 5.0%, below its recent trend, significant mineral wealth, attractive investment opportunities at the sector level, and a growing consumer story underpin our view that Peru will remain one of the most dynamic economies in Latin America in the coming years. We remain below-consensus for 2014 growth, when we are forecasting 5.1% real economic expansion.
- Given our Asia Country Risk team's expectation that Chinese real GDP growth will trend lower in the coming years, as the economy rebalances away from an investment-led growth model to one in which private consumption plays a larger role, we anticipate that Peru will continue to be hit hard through by weaker Chinese demand, lower average metals prices, and more moderate capital expenditure plans by major mining firms. Given these factors, we remain below consensus on real GDP growth in Peru in the next few years, and we anticipate that these dynamics will precipitate a widening of the country's current account deficit, place downward pressures on the budget balance, and result in a weaker currency.
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Major Forecast Changes:
- We have downgraded our current account deficit forecasts given indications that export volumes have begun to fall, exacerbating the expected impact of lower commodity prices. We are forecasting a shortfall of 5.7% of GDP, compared to our previous estimate of 5.2%.
Key Risks To Outlook:
- Given the fact that our sluggish growth outlook for Peruvian exports is based on a number of external factors, including slow growth in China and normalisation of monetary policy in the United States, our forecasts would need to be revised if these developments do not unfold as anticipated.
- Monetary authorities demonstrated a willingness to cut rates to boost the economy in the final quarter of 2013, and if growth remains sluggish we may see further cuts over the course of 2014, posing a risk to our view for the benchmark policy rate to...
The Peru Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Peru and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..
An influential new analysis of Peru's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).
- Forecast the pace and stability of Peru's economic and industry growth through end-2017.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Peru's country risks against regional peers using BMI's country comparative Risk Ratings system.
- Evaluate external threats to doing business in Peru, including currency volatility, the commodity price boom and protectionist policies.
The Peru Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.
How will the Peru economic policy-making and performance impact on corporate profitability over 2013-2017?
BMI provides our fully independent 5-year forecasts for Peru through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Peru Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
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