By Alex Pashley
LIMA, Peru
Peru’s economy is poised to rebound in 2015 after growing its least in five years last year as sliding commodity exports crimped investment, analysts said Tuesday.
“It’s been a very weak and mediocre year,” said Roberto Flores of Lima-based brokerage Inteligo. “If we exclude 2009 which was the year of the global crash, it’s been the worst year for economic performance since 2002.”
But growth will recover in 2015 after picking up in the second half of 2014, Flores added, predicting an expansion of 4 percent to 4.5 percent.
That’s less than the 5 percent Finance Minister Alonso Segura expects Peru to grow, driven by stronger agriculture, fishing and mining sectors.
Gross domestic product expanded 2.6 to 2.7 percent in 2014, half that of the previous year, President Ollanta Humala told Radio Programas on Monday.
Humala’s government reduced taxes and boosted public investment as forecasts were slashed as the trade deficit widened.
Analysts at BBVA Bank expected “a rebound in economic activity,” but warned in a December note that it was “fledgling."
Exports fell 10.5 percent in 2014 on a year earlier, driven by cooling Asian demand for copper, silver and gold. China is Peru’s top export market, with minerals making up the majority of the country's shipments.
Humala said external conditions had been bad for all, “especially those countries exporting raw materials.”
Peru was South America’s fastest-growing economy between 2004 and 2013, averaging 6.4 percent growth.
The latest round of stimulus measures, which cut personal and corporate tax rates, was finally winning back business confidence, Flores said.
The measures make up a recovery package worth an estimated $4 billion, or 2 percent of the gross domestic product in 2015.
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