Peru central bank may trim economy's potential growth rate

LIMA Fri Oct 11, 2013 3:34pm EDT

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LIMA Oct 11 (Reuters) - Peru's central bank said on Friday it is considering lowering the economy's potential growth rate to around 6.2 percent per year from 6.4 percent on expectations global growth will be weaker in coming years.

In 2014 the economy will likely expand by 6.2 percent, said Central Bank Research Director Adrian Armas, and that could be a more realistic pace for future Peruvian growth.

The potential growth rate is the maximum rate the economy can expand without causing too much inflation.

"Our forecast for growth next year is 6.2 percent and in fact we will probably be slightly revising down the potential growth of gross domestic product to around those levels," Armas told reporters in a conference call.

Peru, a top producer of copper, gold and silver, has enjoyed a mining-fueled boom over the past decade, but softer demand from major buyers like China and weaker mineral prices have slowed economic growth more than expected this year.

"We're seeing a new international scenario, a scenario in which we see less growth in emerging economies and that means it is harder to sustain higher growth levels," said Armas.

The economy expanded 5 percent in the first seven months of this year compared to the same period a year ago.

The central bank expects the economy to grow 5.5 percent in 2013, having trimmed its forecast last month from an earlier estimate of 6.1 percent.

Last year Peru posted a 6.3 percent clip, one of the fastest rates in the region.

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