Fitch Ratings sees Peru’s economy growing over 6 percent in 2011

Peru’s economy could expand by more than 6 percent this year, ratings agency Fitch said following the inauguration of President Ollanta Humala on Thursday.

“We calculate that Peru will grow a little more than six percent taking into account that the new government has announced measures for continuity in the macroeconomic management,” state news agency Andina reported Fitch as saying.

Peru’s Ministry of Economy and Finance has forecast that the gross domestic product will expand by 6.5 percent in 2011, compared to 8.8 percent last year.

The latest economic data released is for May. During the month, Peru’s economy expanded by 7.1 percent compared to the year-ago period.

Despite the strong growth, Peru’s economy has seen a recent slowdown. Officials from ex-President Alan Garcia’s administration said this was due to a lack of confidence by investors following Humala’s election.

Members of Humala’s Gana Peru party have said the slowdown was also due to a cut in public spending by Garcia’s government. The Ministry of Economy cut back regional budgets during the first six months of this year.

Fitch pointed to Humala’s speech on Thursday during the inauguration, in which the President said he would look to increase the country’s fiscal revenue in order to face possible external crises and natural disasters.

Humala also said he would promote infrastructure projects, social programs, tourism and Peruvian culture, and honor trade agreements with other countries and blocks.

“These announcements will allow that domestic confidence, that is to say the local investors, recuperates in the second half of the year,” Fitch said.

“If the government that began today is successful, it could also resolve the structural problems and avoid future political risks in Peru.”

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