Politics and Peruvian Economic Growth

Roberto Abusada, director of Peruvian Institute for Economics told the Peruvian business journal Gestión on Friday that it is not too late for the administration of Peruvian president Ollanta Humala to take steps to strengthen the country’s mining and infrastructure.

Abusada believes that President Humala needs to speak loudly and positively about the mining sector. He added that there is a lot of room for actions regarding Peruvian infrastructure, both working directly with regional and local governments to make sure that construction projects are run well and with less corruption, and on large projects, like national rail lines.

A new Stratfor report on Wednesday warned that the next Peruvian president would not enjoy the same economic conditions as President Humala. According to Stratfor, the strong economic growth in Peru over the last 10 years was due solely to the Chinese construction boom, and Peru’s economic growth will now slow, along with China. The next Peruvian president will have to work harder to grow the country in a more unforgiving economic climate.

However, BBVA Research is more bullish on Peru’s medium-term economic prospects. While the economic research firm predicts just a 2.5% GDP growth for Peru in 2015, it believes that growth will rebound to 3.8% in 2016 and 5% in 2017. BBVA argues that increased copper production in the country will power Peru’s economic growth in the coming years.