IMF’s First Deputy Managing Director: Peru’s economic policy to ensure solid economic growth and low inflation in spite of global financial crisis

Peru’s economic policy guarantees continued economic growth and low inflation in spite of the global financial crisis, said the International Monetary Fund’s First Deputy Managing Director, John Lipsky.

“This is the key for helping the poor and reducing poverty,” said Lipsky Tuesday morning, shortly after a private meeting at the Government Palace in Lima with Peru President Alan García, Finance Minister Luis Valdivieso, and World Bank Director Juan José Daboud.

Peru’s current budget policy is heading in the right direction, added Lipsky, to ensure economic growth and low inflation in the future.

In 2007, the Peruvian economy grew 9 percent, the largest growth rate in all of South America.

Growth expectations for 2008 have risen from 7.8 to 8.3 percent — the region’s highest regional growth rate — and are expected to stabilize at 7 percent in 2009, according to an Inter-American Development Bank-sponsored survey published in August.

This puts Peru in the number one position in terms of economic growth in Latin America, said Lipsky, and we consider that it is well prepared ahead of the external financial crisis.

“We, at the IMF, support the Peruvian authorities by means of an agreement that involves supporting current policies,” said Lipsky, “and we are willing to continue supporting Peruvian policies to ensure economic success and the improvement of living conditions.”

“We are always ready and available for dialog with our Peruvian colleagues,” added Lipsky, “about the most adequate and effective manner to support the Peruvian economy.”

According to the IMF’s First Deputy Managing Director, Peru has a strong financial system, and sufficient reserves.

“It’s obvious that the world is going through a difficult and shocking time given the financial market turbulence, and it is also true that there is much uncertainty about the future,” said Lipsky, “but, happily, Peru’s economy is good.”

“Of the all the countries with whom the World Bank has a relationship,” said Daboud, “Peru is very solidly positioned. Its National Treasury is in order and has a structured program that allows it to anticipate the possible impacts of the food, fuel and financial crisis.”

Peru is an example of economic solidity, Daboud concluded, because it “confronts challenges in a straightforward, transparent and consistent manner.”

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