Economic stimulus plan may help Peru exceed 6% growth in 2009

The economic stimulus plan recently announced by the government will help Peru exceed its targeted 6 percent growth rate in 2009, while most of the world is facing recession, said Friday the Ministry of Transport and Communications (MTC) .

"Peru is expected to grow between five and six percent this year, however, after implementing these new measures, growth rate would exceed six percent," said the Minister of Transport and Communications, Enrique Cornejo.

Given the current economic situation, it is very important to improve projections of Peru’s economic growth, taking into account that the International Monetary Fund (IMF) reduced its 2009 forecast for global economic growth to 0.5 percent,

"This means that the European economies, Japan and the United States are declared in recession; however, we hope Peru will grow over six percent in the midst of this international crisis"

He pointed out that the launch of this Economic Stimulus Plan will encourage productive and social sectors to invest about 4,5 billion soles (over 1,4 billion dollars) in the first phase. (Andina)

economic, stimulus, plan, may, help, peru, exceed, 6, growth, in, 2009
economic, stimulus, plan, may, help, peru, exceed, 6, growth, in, 2009

Peru proposes CAN modernization to promote trade opening and investment

The Andean Community (CAN) should modernize itself to promote a major trade opening and investments for the Andean countries development and for the life quality improvement of its population, Peru’s ministry of Foreign Trade and Tourism (Mincetur) said Wednesday.

“The redefinition of CAN should be considered to adapt it to present times, modernize it, and make of us a group of countries that promote foreign trade and development”, Peru’s vice-minister of Foreign Trade Eduardo Ferreyros said.

In this way, he greeted the decision of Bolivia’s government to not oppose to negotiations initiated by Peru, Ecuador, and Colombia to reach a Free Trade Agreement (FTA) with the European Union, but he said that Mincetur asked for CAN redefinition to make easier the bilateral negotiations.

“I think that Cartagena’s agreement, as it is, does not need to be modified, but it would be necessary to consider measures that allows to open trade and attract investments to CAN member countries”, he said to Andina news agency.

He also proposed that the new boost of CAN considers a greater support for strengthening the micro and small enterprises in the region.

“At present, it is necessary to work together in decisions and resolutions to adopt the economic models and trade experiences that each CAN member country considers as the best for its development, without affecting to the rest of Andean members", he said. (Andina)

peru, proposes, can, modernization, to, promote, trade, opening, and, investment
peru, proposes, can, modernization, to, promote, trade, opening, and, investment

Peru to present lowest inflation and highest growth in Latin America in 2009

Peru will lead the economic growth in the region and will register the lowest inflation rate in 2009, according to the last projections of specialists and investment bankers presented in the last report of the consulting firm Consensus Forecast.

The international monthly survey says that Peru would register this year the lowest inflation with 3.4 percent.

This expectation is lower than the one reported by the consulting firm at the end of last year, when this estimated an inflation level of 3.9 percent.

Similarly, this is lower than the rates forecasted by other institutions as Moody’s Economy.com that beginning this year indicated that Peru would post a 4.1 percent inflation.

According to the Consensus Forecast survey, Chile would register an inflation of 3.5 percent, México 4.2 percent, Brazil 4.7 percent, Colombia 5.2 percent, Argentina 7.5 percent, and Venezuela would have an inflation of 35.7 percent.

Experts also indicate that Peru would have the highest Gross Domestic Product (GDP) growth in the region with a five percent rate.

Colombia’s GDP would register a growth of 2.4 percent, Brazil 1.7 percent, Chile 1.6 percent, Venezuela 0.6, Argentina 0.5 percent, while in the case of Mexico, this would drop 0.7 percent. (Andina)

Photo: Financial Center in Lima. Photo:Andina/Archive

peru, to, present, lowest, inflation, and, highest, growth, in, latin, america, in, 2009
peru, to, present, lowest, inflation, and, highest, growth, in, latin, america, in, 2009

Investment commitments to infrastructure projects to total US$ 4.5 billion

Investment commitments to infrastructure projects will amount to 4.5 billion dollars by December this year, reported the Organism of the Investment in Infrastructure of Public Transport - Ositran, Peruvian regulator for the public transportation infrastructure.

“With the information released by the Peruvian Agency for Private Investment Promotion (ProInversión), we estimate that additional investment commitments this year will amount to 900 million dollars, so the total will be about 4.5 billion dollars”.

By December last year, these investment commitments totaled 3.6 billion dollars.

Over the last years, infrastructure concession contracts have increased so currently Ositran regulates and supervises 15 concession contracts.

This year concessions will total 30, including highways such as Autopista del Sol (Sol Highway): Trujillo-Sullana strecht , which will be awarded in the second quarter this year, with an expected investment of 150 million dollars.

In the third quarter this year, IIRSA Amazonas Centro highway with an expected investment of 88 million dollars will also be awarded.

Sea and river ports are also expected to be awarded in the first quarter this year, representing an investment of 448 million dollars.

In addition, the second group of airports located in the south of the country (Nasca, Ayacucho, Arequipa, Puerto Maldonado, Juliaca and Tacna), which will need an investment of 157 million dollars, will be awarded in the third quarter this year. (Andina)

investment, commitments, to, infrastructure, projects, to, total, us, 4, 5, billion
investment, commitments, to, infrastructure, projects, to, total, us, 4, 5, billion

Bush announces succesful completion of Peru-US FTA implementation

The outgoing U.S. president, George W. Bush announced the successful completion of the Peru-US Free Trade Agreement (FTA) implementation and its entry into force from February 1.

“Acting under the authority vested in me by the Constitution and the laws of the United States of America…, and having made the determination of the Implementation Act necessary for the exchange of notes, do hereby proclaim”, said Bush.

This proclamation indicates that the Harmonized Tariff Schedule (HTS) is modified in order to implement the initial stage of duty elimination provided for in the Agreement and to provide for future staged reductions in duties for originating goods of Peru.

The FTA with US will allow the entry of 6,500 tariff-free items from Peru, benefiting the agricultural, textile, manufacturing, fishing sectors among others.

The trade negotiations between Peru and United States started in 2004 and concluded in April 2006 with the signing of the agreement, which was approved by the US Congress in December 2007.

The proclamation took place today, considering that next Monday is a holiday in the United States and on Tuesday, democrat Barack Obama will get sworn in. (Andina)

Photo: US president George W. Bush at the White House.

bush, announces, succesful, completion, of, peru, us, fta, implementation
bush, announces, succesful, completion, of, peru, us, fta, implementation

Peru ranks 57th among world’s freest economies

Peru's economic freedom score is 64.6, making its economy the 57th freest in the 2009 Index of Economic Freedom of The Heritage Foundation, that lists the world’s freest economies. Its score is 0.9 point better than last year, primarily reflecting improved trade freedom.

Peru scores above the world average for seven of the 10 economic freedoms and has recorded growth of approximately 6 percent for five years.

Personal income and corporate tax rates are moderate, and the overall tax burden is not high. Monetary stability is relatively well maintained, and the number of state-influenced prices is limited.

Privatization is ongoing, and overall government expenditures are low. The government is working to increase the accessibility of credit.

Challenges to economic freedom in Peru include labor market rigidity, weak protection of property rights, and a lack of institutional capacity to tackle corruption.

The slowness and unpredictability of the courts have led to allegations of corruption. More dynamic job growth is hindered by a restrictive labor market.

Background

Peru has emerged from the political instability of the late 20th century, and former President Alberto Fujimori has been imprisoned and faces additional charges for offenses allegedly committed during a decade of autocratic rule and a successful campaign against the Shining Path and other insurgents.

President Alan Garcia, who served one term in the 1980s and was re-elected in 2006, has maintained the trend toward economic liberalism and portrays himself as the market-friendly alternative to Venezuela's Hugo Chávez.

Significant natural resources include gold, copper, and silver. Although economic liberalization and fiscal and monetary stability have combined to reduce poverty, more than 40 percent of Peruvians remain poor.

Economic growth has improved, and a free trade agreement between Peru and the United States was ratified by both countries in 2007. (Andina)

peru, ranks, 57th, among, world’s, freest, economies
peru, ranks, 57th, among, world’s, freest, economies

25 new Peru franchises to operate internationally

Franchises are an effective option when seeking how to face the global economic crisis, that is probably why it has been estimated that 25 Peruvian companies will become franchises throughout 2009, affirmed the president of the Peruvian Chamber of Franchises, Luis Kiser.

"While many companies and sectors are worried about the consequences the international financial crisis will bring and a drop in sales, there are other businesses that are seeking and identifying opportunities. This is the case of franchises in Peru", he said.

Kiser said in a local newspaper that franchises were a good option because businesspeople made controlled investments that were low risk.

"This is an excellent opportunity during the difficult times currently being experienced around the world".

There are currently over 12 Peruvian companies running as franchises in markets around the world.

These businesses include brands such as Pardo's Chicken, La Caravana, Al fresco, Rosatel, Bohemia, Rocky's, Mediterráneo Chicken, Segundo Muelle, Astríd & Gastón, La Mar and Bembos among others.

"With the new 25, we'll have a total of 37 Peruvian companies operating as franchises", he said. (Andina)

Photo: Peruvian franchise Bembos. Photo: ANDINA/Archive

25, new, peru, franchises, to, operate, internationally
25, new, peru, franchises, to, operate, internationally

BPZ to invest US$ 86 million in northwest Peru

Houston-based BPZ Energy will continue with its development plans to increase production and oil reserves in the offshore Block Z-1, in northwest Peru, investing 86 million dollars, reported Tuesday BPZ Exploration and Production manager, Rafael Zoeger.

The Company has made a decision to focus on oil development in the offshore Block Z-1 Corvina field with a goal of doubling production and reserves during 2009.

"Our plan is to double our reserves in 2009 by moving probable reserves to proved in Corvina and adding Albacora reserves to our portfolio. Our year-end 2008 production of approximately 6,000 bopd could grow to nearly 12,000 bopd with additional development in Corvina and drilling success in Albacora", he said.

BPZ also expects to increase proved oil reserves from 25 million barrels of oil (Mmbo) to 50 million.

He stated that in the Corvina field, BPZ is finishing testings in the 15D well, and then it will start drilling three development wells: 19D, 22D and 23D.

At the same time, they should finish repairs in the Albacora field and start drilling two exploring wells (A-14XD y 15XD) in the middle of the second quarter of this year.

Dropping oil prices to 40 dollars has forced the company to implement a reestructuration plan to cut 15 to 20 percent of management and operating costs, but without affecting exploration and exploitation plans, he explained. (Andina)

Photo: BPZ CX-11 Platform in Block Z-1 in Corvina, Tumbes. Photo: ANDINA

bpz, to, invest, us, 86, million, in, northwest, peru
bpz, to, invest, us, 86, million, in, northwest, peru

Bush to approve implementation of Peru FTA this week, says minister

Minister of Foreign Trade and Tourism, Mercedes Aráoz, said Tuesday that George Bush's administration will approve this week the implementation of the Free Trade Agreement (FTA) signed between Peru and the United Sates.

"I think the implementation of the agreement will be approved this week by Peru as well as the United States since our country has met all requirements”, she said.

Aráoz stated Peru and US negotiating teams are working hard to implement the bilateral FTA before president-elect Barack Obama takes office on January 20.

"We are going to finish the FTA implementation this week, I'm very confident since Washington officials are doing a great job".

Minister Aráoz expects the Peruvian Congress to approve a proposed rule to amend the Legislative Decree No. 1090 (Law on Forests and Wild Fauna Protection), as well as amendments on the Penal Code, including the General Environmental Law, the General Health Law, the Foreign Trade Facilitation Law.

“Tomorrow we will finish passing all the supreme decrees that are left to implement the FTA, they are a only few compared to the number of decrees we have checked on these issues”. (Andina)

Photo: US president, George W. Bush, drinking Peruvian Pisco Sour. Photo: ANDINA/Carlos Lezama

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bush, to, approve, implementation, of, peru, fta, this, week, says, minister, usa

Peru Economy ministry rises GDP’s estimate growth to 10% for 2008

Peru's Gross Domestic Product (GDP) expansion of 8.7 percent last October would allow closing 2008 with a growth of about 10 percent in the Peruvian economy, Luis Valdivieso, minister of Economy and Finance reported.

Previously, Peru's ministry of Economy (MEF) had forecasted, according to its Leader Indicator, that Peruvian economy would have expanded eight percent in October, accumulating with this a growth of 9.3 percent in 2008

In the framework of the Non Deal Road Show conducted in United States, United kingdom and Spain last December, he said in Madrid that the dynamism of the economic activity is one of the Peruvian strengths at this time.

Valdivieso also projected a growth of 6.5 percent for the Peruvian economy this year, before the adverse impact that could have the international financial crisis.

He also said that other Peruvian strength is to be a net creditor, which implies that Net International Reserves (NIR), which totaled 31.19 billion dollars last year, are higher than the Peruvian total debt of 30 billion. (Andina)

Photo: Peru's minister of Economy Luis Valdivieso. Photo: ANDINA/ Difusión

peru, economy, ministry, rises, gdp’s, estimate, growth, to, 10, for, 2008
peru, economy, ministry, rises, gdp’s, estimate, growth, to, 10, for, 2008