Business Monitor International


Peru Business Forecast Report

Published 24 September 2014 | Quarterly

  • 47 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Peru Business Forecast Report

Core Views:

  • The Peruvian economy will expand at lower average rates in the coming years as a decline in metals prices weighs on private investment into mining and results in slower export growth.

  • However, private consumption and public investment will remain relatively resilient in the coming years due to a rising middle class and an extensive infrastructure project pipeline.

Major Forecast Changes:

  • Real GDP growth fell below our expectations in H114, coming in at 3.3% year-on-year (y-o-y), driven by weak exports and investment, prompting us to downgrade our growth forecast. We now project real GDP growth of 3.8% in 2014 and 4.0% in 2015, compared with our previous projections of 4.5% and 5.0% for 2014 and 2015 respectively.

  • With the Peruvian sol taking a substantial leg lower in recent weeks, in line with poor balance of payments dynamics likely to continue weighing on the currency in the coming months, we have revised our average exchange rate forecasts for the next few years to account for greater weakness, forecasting the unit to average PEN2.830/USD in 2014 and PEN2.900/USD in 2015.

Macroeconomic Forecasts (Peru 2012-2015)
Indicator 2012 2013 2014f 2015f
Note: f = BMI forecast; Source: BCRP, BMI
Real GDP growth, % y-o-y 6.0 5.8 3.8 4.0
Nominal GDP, USDbn 192.7 202.3 205.0 214.9
Consumer price inflation, % y-o-y, eop 2.6 2.9 3.1 2.7
Exchange rate PEN/USD, eop 2.55 2.80 2.90 2.95
Budget balance, % of GDP 2.0 0.7 0.4 0.1
Current account balance, % of GDP -3.4 -5.0 -5.9 -5.6

Key Risks To Outlook:

  • Downside Risks To Growth : Slower-than-expected growth in China, especially stemming from the dynamics of a rapidly cooling property market and high domestic debt (see 'Positive GDP Print Masks Lurking Weaknesses', July 16), could weigh further on investment and metals exports in Peru.

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Political Divisions To Weigh On Humala's Popularity
8
Table: Political Overview
8
Long-Term Political Outlook
9
Mining Disputes Main Threat To Stability
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
External Headwinds To Drive Average Growth Lower
14
table: GDP By Expenditure
14
Fiscal Policy
16
Uptick In Spending To Narrow Budget Surplus
16
Table: Fiscal Policy
16
Balance Of Payments
17
Falling Export Revenues To Hit Current Account
17
Table: Current Account
18
Exchange Rate Policy
20
PEN: Weakness Ahead As Trade Rebalancing Pressure Intensifies
20
table: Currency Forecast
20
Tab le: Exchange Rat e
20
Monetary Policy
21
BCRP To Keep Loose Monetary Policy Through 2015
21
Table: Monetary Policy
21
Chapter 3: 10-Year Forecast
23
The Peruvian Economy To 2023
23
Solid Growth Ahead
23
table: Long-Term Macroeconomic Forecasts
23
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Institutions
26
Table: BMI Business And Operation Risk Ratings
26
Table: BMI Legal Framework Rating
27
Infrastructure
28
Table: Labour Force Quality
28
Market Orientation
29
Table: Trade And Investment Ratings
29
TABLE: LATIN AMERICA - ANUAL FDI INFLOWS
30
Operational Risk
31
Chapter 5: Key Sectors
33
Telecommunications
33
tab le: Telecoms Sector - Mobile - Historical Data & Forecasts
34
tab le: Telecoms Sector - Wireline - Historical Data & Forecasts
34
Freight Transport
35
table: Air Freight
37
table: Rail Freight
38
Table: Maritime Freight
38
Other Key Sectors
41
Table: Oil & Gas Sector Key Indicators
41
Table: Pharma Sector Key Indicators
41
Table: Infrastructure Sector Key Indicators
41
Table: Food & Drink Sector Key Indicators
42
Table: Autos Sector Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Eurozone Downgrade On Poor Q214
43
Table: Global Assumptions
43
Tab le: Developed Stat es, Real GDP Growt H, %
44
Tab le: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Tab le: Emerging Markets , Real GDP Growth , %
45

The Peru Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Peru and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Peru's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Peru's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Peru's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Peru, including currency volatility, the commodity price boom and protectionist policies.

The Peru Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Peru economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Peru through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Peru Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Peru and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Peru, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Peru over the next 5-years?

BMI's Peru country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Peru Market - Political Strengths, Weaknesses, Opportunities and Threats facing Peru.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Peru's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Peru's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Peru, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Peru's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Peru will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Peru's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

secure
Benefit from discounts when you add multiple products to your basket
2 Products SAVE 10%
3 Products SAVE 15%
4 Products SAVE 20%
5 Products SAVE 25%
6 Products SAVE 30%
7 - 20 Products SAVE 35%
21 Products or more SAVE 40%

Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express