Peru is pouring a large sum of money into infrastructure programs with a goal of quickening its economic growth to 4.5% in 2017. Thanks to the continued demand for its copper in the global market, Peru’s economy has remained relatively healthy.
But the Andean country has cut its growth forecast. In its August report, the country’s finance ministry had put economic growth at 5.3% in 2017 and 4.5% in 2018.
Peru’s economy began to slow down a couple of years ago. However, increased copper production from new mines last year helped the country get onto the path of recovery. According to a report from Reuters, even these new mines are now being emptied quickly.
These days, the Andean country is talking of diversifying its economy away from mining. At a recent meeting with investors, Peru’s Finance Minister Alonso Segura conceded that the global slowdown had had its effects on Peru’s economy.
“I believe agendas must be tailored to diversify the economy, we also have to move forward regarding competitiveness, protect the most vulnerable ones, and take into account social policies that have to continue,” he said, according to Andina.
The current administration of Ollanta Humala has invested a total US$8.8 billion in transport infrastructure since 2011. While other major Latin American countries are spending an average 3.5% of their GDP on infrastructure, Peru’s investment in infrastructure accounts to 5% of its GDP.
“We are witnessing a boom in infrastructure. Our spending is well above the regional average,” the minister added. One of the country’s major infrastructure program is the Lima metro.
Local investors have reportedly lined up at least US$40 billion in infrastructure, transport and energy investment projects. But many infrastructure programs have either hit roadblocks or are waiting for approval by the finance ministry.
President Ollanta Humala’s term ends July 28 and the two business-friendly candidates vying to succeed him, Keiko Fujimori and Pedro Pablo Kuczynski, have both promised to boost growth through infrastructure spending.