IMF: Peru to register a "good" economic growth, desired by many countries

Despite the economic situation Latin America faces, Peru will register a "good" economic growth, which many countries would desire, the Director of the Western Hemisphere Department of the International Monetary Fund (IMF) Alejandro Werner affirmed.


"In the case of Peru, we have to highlight that many countries would like to achieve the economic growth rate it [Peru] will register this year [3.8%, according to IMF]. Even if it’s decelerating, after having registered very high growth rates in previous years, it is still a very good growth environment," he told Andina news agency.


Last week, the IMF reduced its 2015 growth forecast for Latin America and the Caribbean to 0.5%, due to the decrease in commodity prices and other severe financial circumstances.


In April, IMF estimated Latin America would expand by 0.9% this year. For 2016, it predicted the region would grow by 1.7%, despite the organization had estimated a 2% expansion rate last April.


Economic cycle


In this sense, the IMF official indicated it is necessary to acknowledge this panorama is part of a "normal" economic cycle, which occurs in many Latin American countries after experiencing an extended and dynamic growth period. It intensified due to the decline in commodity prices.


"The most important thing is to understand this is part of a natural economic phenomenon [...]," stated the IMF representative.


Additionally, Werner suggested Peru must now reflect on the next decade's sources of growth, since commodities will "not" repeat the last 10-year boom.


"In this sense, the driving force of growth will have to emerge from investment, productivity growth and from taking into account issues the region has not completely taken care of, such as: education quality, regulatory enhancements to ease [making] businesses and infrastructure-related aspects, among others," he stated.