MercoPress. South Atlantic News Agency

Peru private sector confident the crisis “has reached the bottom”

Peru’s main private business confederation believes the current economic crisis “has reached the bottom” in the country and forecasts the economy will experience an annual expansion of 3.5%.

“I believe that from a macro-economic point of view the crisis has reached the bottom, although this is not even for all sectors”, said Ricardo Briceño, president of the Peruvian Confederation of Private Business Institutions, Confiep, in an interview with the country’s main daily El Comercio.

He added that “things in Peru won’t get worse. The IMF has estimated a 3.5% growth while Mexico is going to contract 8%. Peru has become an interesting alternative for investors”.

Briceño said that private investment during the first quarter of the year increased between 1.5% and 2% compared to the same period of 2008, according to primary figures released by the Peruvian Central Bank.

“This is something exceptional and evidence of investors absolute confidence in the Peruvian economy”, he underlined. He pointed out that during the peak of the crisis Peru did not undergo a “flight of capital” and there has been no cancelling of private sector investments.

“If we compare the half smile of Peruvian investors with the long faces overseas, what Peru has undergone is a mere laughter. It’s true that there is a reality which is banging on our doors but we need to invest, cut costs, invest in science and technology, in efficiency and maybe less expansion”, suggested Briceño.

He pointed out that the sectors most hit by the crisis have been garments, agro-industry and mining, but “I see no reason why the other productive sectors should have a problem and diminish their pace”.

“The Peruvian banking system is very well positioned and this is acknowledged overseas. There are no financial flow problems, the basic Central Bank rate at 4% will probably again spur credit and should reactivate the economy”, said Briceño.

IMF in its latest Outlook indicated that the Latinamerican economy with the best performance this year in Latinamerica will be Peru with 3.5%., “which is record in the current world context”. The Peruvian economy has expanded at an average 6% during recent years, and last year reached 9.8%.