Economy & Business - April 2007

The latest statistics show that the economy is continuing to grow well. The economy grew 7.43% in February compared with a year earlier. Two credit rating agencies, Fitch and Standard & Poor's, rate Peru's long-term debt at BB+, one notch below investment grade. 

Peru is currently paying about 127 basis points over US Treasuries to borrow money. This is 26 basis points less than Colombia, which has the same credit rating. In 2006 the economy grew by 8% and inflation was 0.3%. 

Only Japan, among the G7 economies, has a lower inflation rate. Garcí­a's decision to cut wages for 17,000 civil servants soon after taking office, helped the government to cut spending to 18% of GDP from 18.9% in 2005. This gave the country a fiscal surplus of NS$6.3bn (US$2bn) or 2.1% of GDP. 

Inflation: In March inflation was 0.35 %, slightly up on February's 0.26%. Even so the rate for the first three months of the year was just 0.62%. The rate for the past 12 months is 0.25%. In 2006 the rate was 1.14%. 

Gold: The country's gold production fell to a four-month low in February to 12.5t. Year-on-year, production is down by 25%. 

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