Private sector investments in Peru are expected to grow eight percent in 2012 amid uncertainty in the global economy, Scotiabank Peru said, according to state news agency Andina.
Scotiabank said that companies are planning “relatively aggressive” investment plans in 2012 and 2013 in a number of sectors, including retail, banks, construction and real estate, as well as mining and hydrocarbons.
Scotiabank said that while social conflicts could affect some mining investment plans, it does not seem to be affecting the sector in general. The latest project to be affected by community opposition is gold producer Newmont Mining’s Minas Conga, located in north-Andean Cajamarca region.
That project, which will require an investment of up to $4.8 billion, has been suspended since November, when local residents held protests over Conga’s impact on water quality and supplies. The lack of success in the negotiations with protesters led to a major cabinet shuffle in President Humala’s government.
Investments in the sector are expected to continue, however, as mining companies are confident that metal prices will remain relatively high, Scotiabank said. The portfolio of mining projects requires investments of approximately $50 billion by 2020, according to the government.
Scotiabank said that public investments are also expected to increase this year. In 2012, the government expects public investments to rise by 30 percent. However, Scotiabank said this could be less, due to delays in executing public spending by regional and local governments.
“In the face of uncertainty, we prefer to be cautious,” the bank said. “Our projection of growth of 23 percent is less than the official forecast, but even still it means a new record in the total amount of public investment (28 billion soles [$10.4] versus the previous record of 26 billion registered in 2010).”
Scotiabank Peru, the local unit of Canada’s Bank of Nova Scotia, is the third largest bank in the Andean country, behind locally-owned Banco de Credito and Spain’s BBVA Banco Continental.
