Living in Peru : your everyday companion

U.S. companies' investment in Peru have increased by 40 percent in the last five years, reaching over 2.7 billion dollars in the last year, Peru's Cementos Lima president Jaime Rizo Patrón said on Saturday.

"Given the historical relationship between the U.S. and Peru we can say that the country is a key partner for the United States, as their markets are complementary," he said.

Rizo stated that last year's Peruvian exports to the United States accounted for 20 percent of the total export voulme, which is remarkable because the beneficiaries of the Peruvian axis include major industrial sectors such as the textile industry.

"For most Peruvian exporters the U.S. economy is the main market and a huge source of revenue. 2,000 Peruvian businesses have taken their products to that country," he said.

Rizo noted that between 1998 and 2008 the total value of exchanged products between the two countries increased by more than 60 percent, and this will be further increased with the entry into force of the Peru-US Free Trade Agreement (FTA).

Foreign Direct Investment (FDI) in Peru amounted to 16.6 billion dollars during the first quarter of 2008, Peru’s Private Investment Promotion Agency (ProInversión) reported.

Spain continued to be Peru's top investment source with 22.11 percent, amounting to 3.7 billion dollars as of June 30.

The United Kingdom ranked second with 20.27 percent and amounted to 3.4 billion dollars. While the United States poured 2.7 billion dollars and ranked third in Peru's foreign investors' list.

These three countries are the main sources of investment for Peru, accounting for 58.77 percent of the total foreign investment in the Andean country.

Peruvian trade and tourism minister Mercedes Aráoz denied Tuesday that local textile and footwear sectors would be affected by the possible signing of a Free Trade Agreement (FTA) with China, adding that the goal of this agreement is to generate more employment.

She noted that the trade deal between Peru and China is balanced and sets guidelines for the protection of the Peruvian textiles and footwear industries.

"It maintains the current levels of protection, with the highest tariff rate that is 17 percent, added to a series of regulations that permit the use of tools such as customs protection measures and trade defense mechanisms," she said on a radio news program.

In addition, minister Aráoz explained that a trade deal with China will benefit Peru’s exports of high-quality products including garments, textiles, grapes, mangoes and other fruits.

She also highlighted that Peruvian entrepreneurs would be able to acquire Chinese technology at lower prices, and therefore, increase their production.

News Source: Andina

Living in Peru
Jobana Soto

The global economy may be on a downturn but that’s not stopping Peru from advancing deals and profiting during the highly publicized Asian-Pacific Economic Cooperation (APEC) Summit this week.

It’s reported that a possible US$6 billion could be invested in the Andean country if successful in securing investment deals and contracts with other APEC members. President Alan García Pérez aims to impress delegates of the country’s growing economy and achievements during his presidency.

In September, government officials announced that Peru had a 9.9 percent economic growth, the highest among any other Latin American country. García sealed a free-trade agreement with the United States and is currently working on signing more with China, Japan, Singapore, Canada and the European Union.

According to Alejandro Gordillo Fernandez, Peruvian Ambassador to Malaysia, he told Bernama in an exclusive interview that García plans to seek investment interests with Malaysia during the APEC Summit with a heavy interest in their palm oil industry. Malaysia is one of the largest producers of palm oil and is commonly used in markets for personal hygiene and food use. The Malaysian government has plans to expand its use in the fueling industry.

APEC accounts for about 55 percent of the world’s gross domestic product, giving Peru an opportunity to bank on investments that will increase its state of economy during the current global crisis.

Peru’s oil market is expected to be a hot topic during APEC as nearly 500 companies have shown interest in wanting to explore oil in the Andean region. “There are a lot of crude oil reserves waiting to be tapped, both onshore and offshore," Fernandez said.

News Source: Bernama

Living in Peru
Jobana Soto

Business is looking good for Peru and China as both countries predict an official agreement over their free-trade pact next week during the Asia Pacific Economic Cooperation (APEC) Summit.

This would be the third free-trade agreement made by President Alan García Pérez to push Peru’s minerals, textiles and agricultural products, especially asparagus and mangos, to the open market.

China is the largest buyer of Peruvian products after the United States, who signed a trade pact with Peru last year that will go into effect in January. Officials say the deal with China is expected to increase Peru’s economic growth by one percent point per year.

Peru's economy is said to be the fastest growing in Latin America. Chinese companies are planning to invest so far US$6 billion in mining development projects in Peru over the next three years.

The free-trade pact between Peru and China will be announced after leaders meet during the APEC Summit.

News Source: Reuters

President Alan García said Monday morning that Peru’s economy will not stop growing because of the global financial crisis or any domestic scandal.

The Peruvian leader participated in the inauguration ceremony of the expansion and modernization of Backus & Johnston brewery plant in the Limean district of Ate.

García noted that the investment made by Backus & Johnston is a sign of confidence in a growing local consumption supported by rising employment which in turn has improved household income in Peru.

"Every day there will be more jobs as well as an increase in household income, and therefore, Peruvians will be able to buy not only beer, but processed fish and milk, more cars, more houses and pay for better education," president García said Monday.

News Source: Andina

There was no need to make significant downward adjustments to growth forecasts for 2008 because Peru’s economic strength has exceeded analysts’ expectations and gross domestic product (GDP) was not affected by the global financial crisis, Scotiabank announced Monday.

Scotiabank analyst Cesar Liendo said that Peru's economy would have grown 9.3 percent in September, registering a growth of almost nine percent in the third quarter and 9.8 percent so far this year.

"This growth was expected, as well as our 8.9 percent growth projection for this year," he stated.
       
In this regard, he pointed out that this projection, made in July, did not include the current instability of financial markets or the notable fall (and/or deceleration) related to the growth of the most important economic blocs.

News Source: Andina

Peruvian coffee exports will total US$600 million this year, and will reach a similar number by the end of 2009 despite world financial crisis, general manager of Romero Trading (owner of Cafetal brand), Fernando Romero announced Monday.

"The international financial crisis is going to have a huge impact any way, but we think coffee exports will reach 600 million dollars next year (the sum we expected for 2008)," he said.

He stated that prices in Peru vary depending on how many quintals were produced in the country, and according to the international price of this commodity.

Peruvian exports surpassed US$400 million in 2007 and its price was US$100 to US$115 per quintal, which are reasonable prices for farmers, for people who roast coffee and for exporters.

News Source: Andina

Bloomberg
Alexander Ragir and James Attwood

Peru's Lima General index rallied 8.5 percent to 8,505.27, extending a gain in the last two days to 20 percent after tumbling 37 percent in October.

Cia. de Minas Buenaventura SA, the biggest Peruvian precious-metals producer, surged 16 percent to $14.87, as gold futures rallied. Zinc producer Cia. Minera Atacocha jumped 30 percent to 2.09 soles as the metal gained for a second day in London.

``It's bargain hunting,'' Gustavo Urrutia, head of research at Centura SAB, said by phone from Lima. ``There are good prices around after markets were overly punished in the last month.''

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The International Monetary Fund (IMF) said today that Peru’s economic policy guarantees stable growth despite the international financial crisis.

IMF's First Deputy Managing Director John Lipsky (far right) indicated that current Peruvian economic policies allowed the country to have a low inflation rate and developed parallelly with the nation's economic growth.

“This is the key to help the poorest people and reduce poverty rate in the country”, he stated after holding a meeting with Peru’s president Alan García, and the minister of Economy and Finance, Luis Valdivieso at Peru's Government Palace.

Lipsky thinks that the current budgetary policy is properly oriented to promote an economic growth and control inflation in Peru.

He also said that Peru's economy has the fastest growth rate compared to other countries in Latin America, and this represents a safe and stable environment for the IMF, in order to face this international crisis.

“The IMF is supporting Peruvian authorities with these economic policies and we are willing to continue helping Peru's policies in order to maintain the economic success and improve the people's standard of living”, he said.