Peru's economy is expected to have expanded 5.5 percent in January from a year earlier, slowing its pace slightly from December, according to the median forecast of 16 economists surveyed by Reuters. Their estimates varied between 5 and 6.5 percent. An increase in government stimulus spending launched in December, mostly in infrastructure, is expected to support growth.
In December, GDP grew 5.96 percent versus the year-earlier month. Last week, Finance Minister Luis Miguel Castilla raised the government's official 2012 growth forecast to 5.7 percent from 5.4 percent as the US economy shows signs of recovery and concerns over the European debt crisis subside.
A central bank official said the economy could expand nearly 6 percent this year, suggesting a potential acceleration in growth in coming months. Peru's economy expanded 6.92 percent in 2011, one of the fastest rates in Latin America. Year-on-year growth was a slightly better than expected 5.96 percent in December according to the national statistics agency.
Slower growth in the developed world has hurt demand for Peruvian textiles and minerals. Mining accounts for 60 percent of the Andean country's exports and the sector has contracted in recent months. Still, Castilla has said Peru is in a relatively good position to withstand fallout from the sluggish global economy if the outlook in the developed world deteriorates.
A fiscal stimulus package could be increased from its current size of about 2 percent of gross domestic product, he has said. The country's stabilisation fund, which provides a further financial cushion above and beyond the stimulus package, will increase to $7 billion this year from $6 billion. Peru also has around $50 billion in international reserves, nearly a third of GDP.
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