Andean Group - 8 February 2005

Growth in 2004 was significantly better than most forecasters expected. GDP growth was probably around 6.6%, thanks to the strong oil price and weak dollar. This led to a surge in imports. This means that the economy has now grown every year since the 1999 crisis.

OUTLOOK

The consensus forecast for growth this year is for a rate of 3.9%. Although several industries, notably timber and mining, finally started to pick up in 2004, the shrimp industry is still a shadow of what it was. In 2004 output did increase by about 7%, but total production is less than half what it was in 1998.
Minimum Wage: Employers and trade unionists agreed to increase the minimum wage by US$6.38 a month. This takes the minimum wage up to US$150 a month. In percentage terms the rise in 4.4%.