Wednesday, November 12, 2014

How To Grow The Peruvian Economy

The Peruvian Production Minister warned on Tuesday that growth in the country’s manufacturing industry would be flat for 2014. The country’s economic performance this year has been its worst since 2009.  Minister Piero Ghezzi added that, unless Peru diversifies its economy beyond the mining sector, it would never be able to regain the levels of 7% annual economic growth.  Nonetheless, the Minister is optimistic that the manufacturing sector and the economy in general will rebound in 2015, thanks to increased public spending by the Humala administration.

From the same press conference, it was reported that Peru plans to increase its federal investment in the development of new technologies. Currently, Peru only invests 0.12% of its GDP in research and development, whereas the regional average is 0.75% of GDP. According to Minister Ghezzi, the government will invest in a total of 268 projects through 2016.  The Peruvian government is already investing in 23 projects, including innovative new businesses and startup business incubators.


Separately, Brazilian state-run oil company Petrobras announced that it had received $2.2 billion from the sale of its oil and gas assets in Peru to PetroChina. The tax bill on this windfall amounted to just $400,000. According to Petrobras, the company is divesting from its foreign assets in order to invest in Brazil’s offshore desposits.

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