Andean Group - November 2006 (ISSN 1741-4466)

GDP grew by 9.6% year-on-year in August. In the first eight months, the economy grew by 7.25%. The central bank is expecting a slowdown in 2007, forecasting growth of between 5.5% and 6%. The bank expects inflation to remain below 2%. Exports are currently rising at an annual rate of 50%, thanks to strong metals prices. Peru is a significant exporter of silver, copper and tungsten. The central government is running a balanced budget, at least for the first nine months of 2006.

Foreign investment: A smallish British mining company, Monterrico Metals, expects to invest US$1bn in developing its Rí­o Blanco copper project near Piura. The company reckons that the project should develop into Peru's biggest copper mine soon after it comes on stream in 2010.

Inflation: Inflation in October was 0.04%, much the same as September's 0.03%. The rate for the first 10 months was 1.4% and the rate for the 12 months to October was 1.9%. In 2005 inflation was 1.5%.