PERU | Growth expectations lowered. The Peruvian government has lowered its growth forecast for next year from 5% to 4%, as part of a review intended to make `more realistic and consistent' its macroeconomic projections up to 2006 (originally made in May last year). Economy minister Jaime Quijandría blames the world economic environment for the poorer performance expected. The government is expecting private investment next year to reach 14.9% of GDP (instead of 16.4%), and has cut its own investment from 3.3% of GDP to 2.8%. In real terms, the falls are greater than these figures suggest, since GDP will be smaller than anticipated.
Last year Peru grew by the highest rate in the region, 5.3%. In the first half of this year the rate slowed to 4.5% (still among the highest), but most economists expected a further slowdown in the second half.
Quijandría has warned that a key feature of the projections, the fiscal deficit target of 1.4% of GDP, could be jeopardised if the budget is compromised by demands for higher spending from the regional governments and some unions.
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