Peru’s economy set to grow 7% this year

Credit risk agency Moody’s Investors Service yesterday issued a report estimating that the Peruvian economy will grow by 7% this year, well ahead of the Latin American average of 4.2%

This year’s growth across the region will probably be lower than last year’s (5.3%), and this slowing will be most pronounced in Mexico, Argentina and Venezuela, while only Brazil and Chile are expected to report an acceleration in economic growth, with 4.3% and 5.2% forecast respectively.

Moody’s explains that last year Latin America saw one of the highest rates of growth, including a marked reduction in poverty.

Among the seven largest economies in the region, growth was highest in Argentina, Colombia, Peru and Venezuela, with Brasil, Mexico and Chile registering more modest rates. The agency does not expect internal conditions to change significantly in 2007, as it is clear that external conditions are moving towards a less favorable position, which means that Latin America will face economic and financial challenges in the foreseeable future.

However, it considers the region’s economies likely to remain strong, and suggests that they will continue to grow in the worldwide environment.

For 2008, Moody’s believes that internal conditions will begin to deteriorate in certain countries, chiefly Venezuela and Argentina, where internal instability increases vulnerability to external factors.

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