Peru’s central bank raised its forecast for economic growth this year to 5.7 percent as a stronger global economy boosts the outlook for investment and exports in the third biggest copper-producing nation.
Exports will rise 5.1 percent to a record $48.7 billion, boosting the outlook for the $176 billion economy, the bank said in its quarterly inflation report issued in Lima today. The bank previously saw growth of 5.5 percent and exports little changed.
The central bank maintained its key interest rate at 4.25 percent for a 10th month on March 8 after exports climbed 35 percent in January and business confidence rose to a one-year high in February. Confidence is rising after Europe’s debt crisis eased and growth in the U.S. economy picked up, the bank’s President Julio Velarde told reporters in Lima today.
“January saw a recovery in GDP and domestic demand remains very strong,” Velarde said. “There’s increasing confidence among economic agents.”
The country’s annual inflation rate will probably return to the central bank’s 1 percent to 3 percent target range in the second half, after reaching a two-year high of 4.74 percent in December, Velarde said.
“Apart from oil prices, we don’t see significant supply shocks,” Velarde said. “We don’t see significant pressures from demand. At 5.7 percent growth still remains below potential.”
The central bank left its estimate for 2013 growth unchanged at 6.3 percent.
To contact the reporter on this story: John Quigley in Lima at firstname.lastname@example.org
To contact the editor responsible for this story: Joshua Goodman at email@example.com