Peru Economy Grew in August at Fastest Rate Since 1998

godking
24 October 2005 6:00am

Peru´s economy grew in August at the fastest annual rate since 1998, as benchmark interest rates near record lows lure investment from Mexican billionaire Carlos Slim and companies such as Hunt Oil Co.

Growth in the 12 months through August quickened to 5.9 percent from 5.9 percent in July and 3.8 percent a year earlier, the government said. The pace of annual expansion was the fastest since at least March 1998, when the economy grew 6 percent.

“We are investing because we believe in Peru´s potential,” said Humberto Chavez, who heads the local unit of America Movil SA, Latin America´s largest wireless phone operator, at a recent news conference in Lima.

Peru´s economic expansion probably peaked after 49 straight months of growth, and is poised to slow next year to 4 percent, according to economists such as Guillermo Arbe of Apoyo Consultoria.

Still, slower growth may not discourage business from investing more in expansion in Peru, where a stable currency and interest rates and rising wages likely will sustain demand and corporate profits, Arbe said.

Peru´s ongoing economic expansion, its longest on record, has averaged 4 percent annually over the past four years, the second-best performance in Latin America after Chile. The main engine of growth in that period was exports, which doubled since 2002 to about $16 billion this year.

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