Over the last decade, Peru s economy has been driven largely by private consumption and investment, particularly into the country s large extractive sector. In the coming years, we ex- pect that consumption growth will be the economy s primary driver. Structurally lower metals prices will slow the pace of investment into the country s extractive sector, though this will be offset to an extent by increasing investment into non- extractive sectors. After the commodities price boom pushed average growth to -.- between ---- and ----, we expect a period of relatively slower growth, averaging -.- between ---- and ----, slightly below long-run average preceding the commodities boom. Private Consumption: Private consumption accounts for the majority of Peruvian output, and we expect the economy to be increasingly driven by consumer spending in the years ahead. ...The Peruvian government will play an important role in supporting increased fixed capital investment in the country, as it encourages investment with tax incentives and supportive regulatory frameworks. Investment into the extractive sector will slow gradually in response to structurally - Business Monitor International Ltd www.bmiresearch.com
...Real GDP growth, y-o-y -.- -.- -.- -.- -.- -.- -.- -.- -.- -.- -.- -.- GDP per capita, PEN --,---.- ...Source: BCRP, BMI lower metals prices, but investment into non-extractive sectors will pick up as the Banco Central de Reserva del Peru (BCRP) allows the Peruvian sol to depreciate over the coming quarters, making non-mineral exports more cost competitive. Over a multi- year time horizon, infrastructure investment will benefit from Peru s participation in the Trans-Pacific Partnership, which will introduce more efficient procurement processes and facilitate technology transfers. ...However, we expect Peru s goods trade account deficit to narrow in the coming years from a forecast peak of -.- of GDP in ---- to -.- of GDP in ----, as the gradual recovery of metals prices encourages greater production. Import growth will be driven by demand for consumer goods as household incomes rise in response to improving employment opportunities.
...Real GDP growth in Peru will accelerate in ----, driven by strong production growth in the country s extractive sector. Rising capital ex- penditures and regulatory improvements will drive investment into key infrastructure projects. ...
