Category: Peru

Peru’s president-elect, Alan García, has picked Jorge del Castillo to be his prime minister when he forms his new government on July 28. Del Castillo is secretary-general of García’s party APRA, and heads a congressional committee on promoting investment. García’s choice has been criticized by some who believe he should have picked an independent to serve as Cabinet chief.

Peru’s president-elect, Alan García, has picked Luis Carranza Ugarte as his finance minister when he takes office at the end of this month. Carranza, an economist, served as deputy finance minister under Alejandro Toledo and as a director of the Central Bank. He will join from his current position at Banco Bilbao Vizcaya Argentaria (BBVA) in Spain. García also appointed José Antonio García Belaunde, a career diplomat, as foreign affairs minister.

Peru’s private investment promotion agency ProInversion has said it expects the first stage of the country’s regional airports concessions process to attract around $100 million in investments. The Agency will be accepting bids August 16 and will award the concession shortly thereafter. Concessions will be awarded for the operation and maintenance of nine of the 12 regional airports for the next 25 years with a possible extension up to 60 years. Interested parties include Aeropuertos Unidos del Perú and Swissport GBH-Aeropuertos.

Peru’s Central Bank left the benchmark interest rate unchanged at 4.50% for the second month in a row, in line with market expectations. Meanwhile, preliminary figures showed economic growth for the first half of the year slowed to 6%, down from 6.8% recorded in the first quarter.

Gerdau, Latin America’s largest steelmaker, bought a 52 percent stake Siderperu for $62.7 million from the Peruvian government, fending off India’s Global Steel Holdings Ltd. The government acquired the stake in the company based 422 kilometers north of Lima last March in lieu of money owed. The price was a 25 percent premium over the current stock market value of the company’s shares.

Peruvian legislators overwhelmingly approved a free trade agreement with the United States that would boost the economy through increased exports. The government now hopes the U.S. Congress will do the same before the summer recess, although even ministers admit this may not be easy.

Peru has picked a UK-Spanish consortium to build and operate a major new port terminal – known as Muelle Sur – at Callao, the country’s most important port just south of the capital, Lima. Terminal Internacional de Contenedores del Callao, which comprises P&O Dover of the UK (70%) and Uniport of Spain (30%), has committed to invest $357 million in the project.

Peru’s GDP grew by only 3.63% in April, compared with the same period in 2005. This compares with year-on-year growth of 10.7% in March and 4.9% in February. Declining output of manufacturing, fishmeal and natural gas were behind the slowdown. Annual inflation for the four months to April was 5.94%. Growth for the year is forecast at over 5%.

Alan García, former president and unlikely comeback kid, appears to be the winner of Sunday’s voting in Peru’s second-round presidential elections. Exit polls Sunday evening indicated that García had won 58.2% of the vote against 47.2% garnered by Humala. García’s first time in office, between 1985 and 1990, saw Peru default on its debt and annual hyperinflation of 8,000%. However, voters have obviously forgiven or forgotten García’s record of economic management or perhaps are simply voting against the alternative: former coup leader and ex-military man, nationalist Ollanta Humala. García polled 24.3% of the vote against Humala’s 30.6% in the first-round poll on April 9. He narrowly beat off market favorite, conservative Lourdes Flores, who gained 23.8% of the votes.

Peru’s Central Bank decided to hold its benchmark interest rate unchanged yesterday, Thursday, for the first time in six months, keeping it at 4.50%. A rise of 25 basis points had been expected by economists to help cool domestic demand, which is driving Peru’s continued economic growth. GDP expanded by 6.8% in the first quarter of the year, compared with the same period in 2005. Internal demand rose by 9.9%, driven mainly by capital investment. Meantime, the rate of inflation in May declined for the first time since September last year, falling 0.53%. Annual inflation slowed to 2.2%, within the government’s target range of 1.5% to 3.5%.