Peru to Lose GDP on Earthquake

Peru will lose around 0.3% of real GDP growth this year, according to Goldman Sachs, which cites President Alan García, who also said that real GDP growth should hover at around 7.6% this year, versus an estimate of 7.9%-8.0% before the earthquake. The fiscal cost of reconstruction and social assistance to the affected by the earthquake remains unclear. “At 0.3%-0.4% of GDP, the costs of reconstruction appear to be moderate,” says Goldman. “Given a robust fiscal situation, we believe that the government should be able to absorb such cost, with no major financial implications,” it adds.