Macroeconomic Forecast Peru

Peru's current account surplus declined to US$1.5bn in 2007, from US$2.6bn a year earlier, as the country's trade surplus declined by 6.5% on the back of rising import growth of 32%. Meanwhile exports grew by merely 17% last year. We caution that the slowdown in global economic activity this year and high commodity prices threaten to see a more pronounced deterioration in Peru's trade dynamics. Indeed, the Banco Central de Reserva del Peru forecasts a current account deficit of 1.9% of GDP this year. While we concur with the bank that the current account surplus will shrink this year, we are forecasting a surplus of 0.1% of GDP.

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