The World Bank and International Monetary Fund lowered their forecasts for Peru’s economic growth this year, along with other countries in Latin America.
On Wednesday, the World Bank said that it expects Peru’s gross domestic product to expand 5.5 percent in 2013, which is down from a forecast of 6.0 percent in April.
The World Bank said that despite Peru’s slower growth, the Andean country will still post one of the fastest rates of growth in Latin America this year.
In April, the World Bank said that it expected Latin America and the Caribbean to grow an average of 3.5 percent in 2013. On Wednesday, the bank said it now expects growth of 2.5 percent for the region.
“Lower growth estimates take into account strong pressure on the value of local currencies as well as a stubbornly slow rebound in the US and increasing deceleration in China, the engine behind the region’s commodity-fueled bonanza,” it said, adding: “Diminished growth expectations occur despite the region’s continuing sound macroeconomic fundamentals, which contributed to Latin America’s recent dramatic social and economic progress.”
The lower growth projection for Peru comes after the International Monetary Fund also lowered its growth forecast for the Andean country. The IMF said Tuesday that it now expects Peru’s gross domestic product to rise 5.4 percent in 2013, down from a previous estimate of 6.3 percent, state news agency Andina reported.
The IMF also said that Peru will remain one of the fastest growing countries in the region this year.
The lower forecasts from both the World Bank and IMF are in line with lower expectations from Peru’s Central Bank, finance ministry and private sector.
Credite Suisse said it expects growth to recover in 2014, thanks in part to recent measures by the Central Bank to stimulate credit. The Central Bank has in recent months lowered its reserve requirements for commercial banks as part of a strategy to inject liquidity into the financial system.
Credite Suisse said the “recent reserve requirement measures will probably move the economy in the coming quarters and it will help production expand quickly in 2014 compared to 2013.”