Scotiabank: Peru’s construction sector to grow by 8 percent in 2009

An increased injection of public funds into Peru’s still booming construction sector will allow the industry to continue to expand at a steady rate of 8 percent throughout 2009, said Scotiabank Senior Economist Pablo Nano.

In spite of the increased cost of land and construction materials, Peru President Alan Garcia’s anti-crisis plan and its particular focus on Peru’s construction sector will lead to steady and sustained growth, said Nano in comments to daily Peru21.

In December, Garcia presented an emergency $3.2 billion anti-crisis package, which seeks to boost public expenditure on infrastructure — including housing, irrigation and public works, highways and hospitals — and to stimulate private investment.

Of the government’s 52 planned projects for 2009, 12 involve highway development, as well as expenditure on health and education infrastructure.

“The sector’s expansion began with the construction of homes, and then office and commercial buildings, and then the expansion of productive infrastructure,” said Nano.

In 2005, public funding of infrastructure amounted to 2.8 percent of Peru’s GDP. By 2008, investment jumped to 4 percent of Peru’s GDP, and the construction sector expanded by 16.5 percent that same year. It has been the Andean country’s most dynamic sector for the past three years.

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