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UPDATE 1-Peru central bank raises view of GDP, trims trade surplus
March 22, 2013 / 5:55 PM / in 5 years

UPDATE 1-Peru central bank raises view of GDP, trims trade surplus

LIMA, March 22 (Reuters) - Peru’s central bank has grown slightly more optimistic about the economic outlook in 2013 than it was in December, predicting target inflation and slightly stronger growth as surging domestic demand offsets weak mineral exports.

The overall economy will likely grow 6.3 percent in 2013, the central bank said on Friday, slightly more than its estimate of 6.2 percent at the end of last year and in line with what the economy ministry expects.

The central bank also said annual inflation by the end of the year should be at its target rate of 2 percent.

The central bank trimmed its view of Peru’s 2013 trade surplus to $2.77 billion from its previous estimate of about $4 billion.

“A smaller trade surplus is expected and is explained by decreased growth in the volume of gold and coffee exports and decreased external demand for textiles,” Central Bank President Julio Velarde told reporters on Friday.

Growth in Peru has been led for the past few years by solid domestic demand that has outpaced weaker exports amid wobbly economic growth abroad.

The central bank said it expects domestic demand to expand 6.8 percent this year, up from its previous 6.3 percent forecast. This should help offset an expected expansion of just 4 percent in Peru’s export-oriented economic sectors.

Peru will also probably post a current account deficit equal to 4 percent of gross domestic product in 2013, the central bank said, and a fiscal surplus of 1 percent of GDP.

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

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