Peru: Years of growth will help to combat crisis

Associated Press

Nearly a decade of growth has given Peru the strength to counteract the global financial crisis and maintain the Andean nation in the upper echelons of global economic growth, with a 5 percent rate this year, Peru’s finance minister said Monday.

"Things are going well in Peru; out there it’s different," Finance and Economy Minister Luis Carranza (right) told Lima-based RPP radio.

The surpluses Peru has enjoyed over the past three years will allow the government to boost public investment by 52 percent this year to maintain employment, Carranza said.

The boost is part of a $3 billion anti-crisis package the government announced in 2008, aimed at infrastructure and public works.

The finance ministry estimates that the economy grew by 9.4 percent in 2008, the highest growth in the region and one that surpasses even booming China’s 9 percent growth rate for the same year. Official figures for Peru will be released this week. The economy, which has been expanding for more than seven years, grew 8.9 percent in 2007.

Peru, which holds $32 billion in U.S. dollar reserves, is currently running a "small" deficit equal to 0.7 percent of its gross domestic product, Carranza said. He said it will be covered with savings from last year.

"We are not excessively increasing the debt, we are using only a part of the surplus from 2008 to finance 2009," Carranza said.

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