Peru will increase deficit spending to boost the country's sputtering economy

This week, the Peruvian government announced a $1.6 billion package of new stimulus efforts to try to boost the country’s economy, after the country’s heady growth slowed to just 2.35% in 2014. Jaime Reusche, a senior analyst at Moody’s, was quoted by Reuters as saying, “The big question is going to be whether or not the private sector is going to respond to these measures.” Unfortunately, the Peruvian finance ministry predicts that private investment will rise by just 1.5%, well below its initial forecast of 6%.

Though private investment overall is expected to rise, the Peruvian ministry of finance and economics predicts that private sector investment in the mining sector will fall by 7% in 2015, to approximately $8 billion. Given the furor that has erupted both locally and nationally over the Tía María copper mining project, the Peruvian government should probably be happy that more investment dollars have not disappeared. That said, the investment dollars accounted for in the 2015 totals are from projects that have been in development for a long time. The concern for Peruvian officials will be to maintain the pipeline of future projects.

In other mining related news, Los Andes published an opinion piece by Peruvian anthropologist Carlos Herz Sáenz defending the protestors who have frequently been labeled as “anti-mining” and “anti-investment” by the Peruvian press. Sáenz explained that these protestors are simply asking that the fundamental human rights of the Peruvians living in these communities where the mining projects are developed, be respected. He argues that all they want is basic education and health infrastructure, to just be included in the “system” that they are supposedly protesting against.