Peru finance minister reports ‘07 economic growth highest in 13 years

Economy and Finance Minister Luis Carranza announced today that Peru’s 2007 economic growth was 8.3 percent, the highest since 1994. Carranza said the growth was to increased in private consumption and investment, Agencia Andina reported. Private investment, for instance, increased by 25.5 percent while private consumption grew by 7.4 percent.

The impressive growth came despite a heavier tip in Peru’s trade balance compared to the year prior, he told reporters. “In effect, during 2006 the terms of trade grew by 27.4 percent, while in 2007 it grew by only 5 percent.” Carranza attributed the decline to a 58.6 percent increase in the price of oil and a 83.8 percent increase in the price of wheat.

Among other statistics provided by Carranza are Peru’s GDP per capita, which increased from $3,377 in 2006 to $3,931 in 2007, as well as Peru’s 3.9 percent inflation rate, the third lowest in Latin America according to the Central Reserve Bank of Peru.

“The sustained economic growth… will also be transferred to citizens through a greater quality in public services and an increase in social spending and public investment” said Carranza. “The main objective is to reduce poverty by 30 percent by 2011.”

However, economic growth has not always meant social and economic improvements for the vast majority of the Peru’s poor. “One transcendental aspect of Peru’s situation is the vast inequality in living conditions and welfare among population groups, among regions, and between rural and urban areas,” said a 2007 report by the Pan American Health Organization.

“While 20 percent of the population with the highest income received 27.5 percent of national income, the 20 percent of the population with the lowest income received only six percent.”

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