Download Global Crude Outlook James C. Gibbons 212-834-5213

Perú: Recent Economic Developments
and Perspectives
Central Reserve Bank of Peru
October 2002
Contents
 GDP: Sources of Growth
 Balance of Payments
 Monetary Policy
 Fiscal Policy
2
GDP and Domestic Demand rates of
growth
8,0
6,7 6,9
GDP January-August 2002: 4,1%
6,0
4,2
4,0
3,9
3,1
3,1
3,5-4,0
3,3
3,1
2,6
2,4
2,0
3,7
0,9
0,2
0,0
-0,5
-0,8
-0,7
-2,0
GDP
-3,1
-4,0
1997
1998
1999
2000
2001
2002-IS
2002-IIS
2002
Demand
2003
3
Private Fixed Investment rate of growth
In the third quarter of 2002 Private Investment has increased 4,4 percent
20
16,3
15
10
5
5,9
2,6
3,8
0
-5
-0,2
-2,0
-2,4
-5,6
-10
-15
-15,3
-20
1997
1998
1999
2000
2001 2002-I 2002-II 2002
2003
4
Global Supply and Demand
ATPDEA: Extension of trade
agreement with US (Clothing and
agricultural products)
GLOBAL SUPPLY AND DEMAND
(Percent variations)
Investment: Camisea Gas project
(US$ 300 million in 2002 and
US$ 500 million in 2003).
Terms of trade: 3,2% in 2002 and
2,3% in 2003.
GDP growth in 2003 (trade
partmers): 2,9%
El Niño (moderate) with possitive
impacts in crops like grapes,
mango, corn, sweet potatoes and
sugar cane. Negative impact in
fishing.
2001
I Sem.
2002
I I Sem.
0,4
3,5
3,8
3,6
3,6
-0,7
2,6
3,9
3,3
3,1
1,3
-0,5
-8,0
-5,2
3,5
4,2
-1,4
-0,2
3,8
2,5
5,1
5,9
3,6
3,3
1,7
2,6
3,0
0,2
4,3
3,8
6,9
8,6
3,1
5,6
6,4
0,4
3,5
3,8
3,6
3,6
3. Gross Domestic Product
0,2
4,2
3,1
3,7
3.5-4.0
a. Primary sectors
b. Non-primary sectors
1,9
-0,2
8,2
3,2
3,9
3,0
6,1
3,1
4,3
3,3
1,6
-0,8
7,4
3,3
4,2
I. GLOBAL DEMAND (1 + 2)
1. Domestic demand
a. Private consumption
b. Public consumption
c. Domestic gross investment
- of which private investment
2. Exports
II. GLOBAL SUPPLY (3 + 4)
4. Imports
Year
2003
5
Gross Domestic Product (by Sector)
GDP driven by growth of primary
GROSS DOMESTIC PRODUCT
(Percent variations)
sectors.
Mining growth in 2002 due to the
increase in zinc production
(Antamina) and copper (Southern).
In 2003 the growth is explained by
greater zinc, copper and silver
production.
Manufacturing growth during 2003
will respond to positive effects due
to the ATPDEA.
Increase on manufacturing and
construction lead this impulse
through their positive impact on
employment.
I Sem.
2002
II Sem.
Year
-0,6
6,4
1,7
4,3
3,4
-13,3
-8,3
12,1
-0,8
5,5
Mining and Fuel
11,2
20,9
6,4
12,9
4,9
Manufacturing
-1,1
1,9
3,7
2,8
3,9
Construction
-6,0
8,9
5,4
7,1
4,2
Trade
0,0
2,1
2,7
2,4
3,3
Other Services
0,4
3,0
2,6
2,8
3,1
GDP
0,2
4,2
3,1
3,7
3,5-4,0
GDP Primary Sectors
1,9
8,2
3,9
6,1
4,3
-0,2
3,2
3,0
3,1
3,3
ECONOMIC SECTORS
Agriculture and Livestock
Fishing
GDP Non-Primary Sectors
2001
2003
6
World Economy
GROWTH OF MAIN TRADE PARTNERS1/
(Percentage)
September Forecast
Weight of Trade
Partners * (%)
Trade Partners
100
2001
1,2
North America
United States
Europe
Asia
Latin America
39
34
24
16
22
0,3
0,3
1,6
2,6
1,4
2,2
2,2
1,3
3,0
-1,3
2,7
2,6
2,3
4,3
2,8
2,2
2,8
3,7
Note:
World Average
2002
1,4
2003
2,9
* Weighted by 2001 trade share (excluding oil).
1/ Source: World Economic Outlook FMI
7
Contents
 GDP: Sources of Growth
 Balance of Payments
 Monetary Policy
 Fiscal Policy
8
Sustainable External Accounts
12,0
% of GDP
9,9
10,0
8,0
6,0
5,8
5,9
5,5
4,8
4,0
2,9 3,2
2,9
2,0
2,0
4,2
3,7
2,2
1,9 2,2
0,0
1997
1998
1999
2000
2001
2002
2003
Current Account Deficit L-T-Private K Flows
9
New Projects will turn Trade Balance into
surplus
Million US$
12000
11000
Exports
10000
Exports and Imports Growth Rates
9000
8552
8545
8222
7713
8000
7000
Imports
6832
6749
7034
7351
7108 7198
7871
7423
Exports
Traditional
Non-traditional
Others
6119
5757
6000
2002
8,5
11,1
5,9
27,4
2003
10,8
9,1
14,6
12,8
3,1
6,0
5000
Imports
4000
3000
1997
1998
1999
2000
2001
2002
2003
10
Foreign financing requirement
 The foreign financing requirement in 2002 amounts to US$ 5,3 billion, thus
decreasing down to US$ 3,1 billion in 2003.
 Non-financial public sector’s requirement will decrease its foreign financing
requirement from US$ 2,9 billion in 2002 to US$ 1,8 billion in 2003.
2001
(Millones of US$)
1. Current account
(% de GDP)
2. Total amortization
1/
a. Non-Financial public sector
b. Private sector
3. NIR accumulation
4. Gross foreign financing requirement (=-1+2+3)
a. Non financial public sector
b. Private sector
1/
I Sem
2002
II Sem
Year
2003
-1094
-2,0
-641
-2,2
-598
-2,2
-1239
-2,2
-1119
-1,9
1797
768
1029
979
432
547
914
505
409
1893
937
956
1933
1074
859
433
513
737
1250
70
3324
2133
2249
4382
3122
1351
1973
910
1223
1136
1113
2046
2336
1827
1295
1/ Excluding Brady´s Bond swap of febreary 2002.
11
Net International Reserves
BCR´s net international reserves
(January 2001 - October 2002)
10 500
Million of US$
October 22: US$ 9 9 75 million
10 000
9 500
9 000
8 500
8 000
7 500
7 000
Jan Feb Mar Apr May Jun Jul
2001
Aug Sep Oct
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep. Oct.22
2002
12
Indicators of External Vulnerabilities
1. Current Account Balance (% of GDP)
2. Export concentration
4 products
4 countries
3. Net International Reserves/Short Term Liabilities
2%
48%
50%
200%
4. External Debt (% of GDP)
37%
5. Public Debt Service (% of Exports)
26%
13
Contents
 GDP: Sources of Growth
 Balance of Payments
 Monetary Policy
 Fiscal Policy
14
Inflation Target: 2.5% +/- 1%.
9,0
7,4
7,2
7,0
6,5
6,0
Inflation Targeting adopted in 2002
Jan-Sep 2002:
Headline 1,2 percent
Core 1,3 percent
5,0
3,7 3,9
3,7
3,1
3,0
2,5
2,0 2,0
2,0
1,1
1,0
-0,1
-1,0
1997
1998
1999
2000
2001
2002
2003
Headline Core
15
Exchange Rate Indicators
16
Interbank Interest Rate
Interest rates in domestic currency
(October 2001 - October 2002)
18,0%
Maximum
16,0%
Minimum
14,0%
12,0%
10,0%
Rediscounts
8,0%
6,0%
Interbank
4,0%
2,0%
Overnight
in S/.
0,0%
Oct.
2001
Nov.
Dec.
Jan.
2002
Feb.
Mar.
Apr.
May.
Jun.
Jul.
Aug.
Sep.
Oct.22
17
Latin America Exchange Rates
Currency Depreciation
Latin American
Countries inflation in
2002
265
Bolivia
Chile
Mexico
Colombia
Brasil
Paraguay
Uruguay
Venezuela
Argentina
107
93
42
Argentina
Uruguay
Venezuela
Brazil
32
Paraguay
20
Colombia
10
Mexico
1.1%
2,8%
4,9%
6,1%
6,8%
11.1%
22.7%
32,5%
72,2%
9
7
5
Chile
Bolivia
Peru
18
Spread of Foreign Bonds
Spread of sovereign bonds
(December 1999 - October 2002)
1500
1300
Latin America
1100
900
700
500
Peru
300
100
D J F M A M J J A S O N
99
00
D J F M A M J J A S O N D J F M A M J J A S O22
01
02
19
Bank’s asset quality
Nonperforming loans to total loans ratio has dropped from 9,8% in 2000 to 9,0% in
2001 to 8,4% in July 2002.
12
Non performing loans / total loans
10
9,8
9,0
8,3
8
6
8,4
7,0
5,1
4
2
0
Dec 1997
Dec 1998
Dec 1999
Dec 2000
Dec 2001
jul-02
20
Credit to the Private Sector
Credit has increased in 1,3 percent in september (12 month growth.
In 2003 it is expected to grow 4,5 percent
6
4,1
4,5
2002
2003
Real Growth Rate
4
2
0
-2
-4
-3,1
-4,6
-6
2000
2001
21
Interest rates 2001 - 2002
Prime interest rates in domestic currency have shown a decreasing pattern
similar to the interbank interest rate.
Prime interest rates in foreign currency have decreased to levels below 2,7% in
September.
Monthly average interest rates in foreign currency
(January 2001 - October 2002)
Percentage
14
18
16
8,9
8,6
8
8,6
14
6,8
5,9
6,4 6,5
0
5,5
5,0
4
2
Corporate prime
6,8
7,4
6
Perc entage
20
12
10
M ontlhy av e rage inte re st rate in dome stic curre ncy
(January 2001 - O ctobe r 2002)
Interbank
4,7 4,4
4,1 3,9 4,1
8
3,7
3,4
3,2
2,7
3,1 2,9 2,9 2,9 2,9
2,7 2,8 2,7 2,7 2,7 2,7
6
4
2,1
1,8 1,9 2,1 2,0 2,0 2,2 2,1 1,9 1,9 1,9
1 1
Jan Feb Mar Ap r May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep.Oct.21
2001
2002
2
16,0
14,2
13,0
12
10
5,0
15,5
13,8
13,2
12,4
12,1
12,5 12,7
10,8 11,0
Corporate prim e
10,8
9,4
10,3
8,8
8,0
8,4
Interbank
6,8
6,3
5,0
5,7 5,9
4,5
3,5
4,3 3,9
3,1 2,7
2,6
3,9
2,5
3,8
2,5
3,5
2,5
3,7 4,1 4,1
2,6
5,6
4,8
2,9 2,9
0
Jan Feb Mar A pr May Jun Jul A ug Sep Oc t Nov Dec Jan Feb Mar A pr May Jun Jul A ug Sep. Oc t.21
2001
2002
22
Dollarization
In September 2002 total liquidity in dollars is equal to US$ 9,8 billions and the
dollarization ratio has fallen to 55 percent.
On the other hand, Banking system deposits at the Central Bank are US$ 3 805
million.
70
65
Dollarization Ratio (%)
60
60
59
55
55
2001
Sep. 2002
55
50
45
40
1999
2000
23
Contents
 GDP: Sources of Growth
 Balance of Payments
 Monetary Policy
 Fiscal Policy
 Risk Balance
24
Reduction of the Fiscal Deficit
% of GDP
4,0
3,2
3,2
3,1
3,0
2,3
2,3
1,9
2,0
1,5
0,9
1,0
0,0
-0,2
-1,0
1997
1998
1999
2000
2001 2002-I 2002-II 2002
2003
New tax measures:
• Advanced payment system of income tax based on 1% of net assets.
• New VAT system of witholdings
25
Public Sector Borrowing Requirement
 The fiscal policy target
is to reduce the deficit
from 2,2% of GDP in
2002 to 1,9% in 2003,
toward levels below 1%
in the medium term.

The Public Sector’s
financial requirement
would amount to US$
2,3 billion in 2002 and
to US$ 2,6 billion in
2003.
2001
2 002
I Sem.
II Sem
Year
2003
Percentage of GDP
I.
II
III.
IV.
Current revenues
Non-financial expenditure
Other public entities
Interest
FISCAL DEFICIT/SURPLUS
(I+II+III+IV)
14,1
-14,9
0,7
-2,2
13,5
-13,5
0,5
-2,0
15,1
-16,0
0,1
-2,3
14,4
-14,8
0,3
-2,1
14,7
-14,5
0,3
-2,4
-2,3
-1,5
-3,1
-2,2
-1,9
Millions of U.S. dollars
I.
Fiscal deficit/surplus
-1 276
- 418
- 865
-1283
-1118
II. Total Amortization
III. Financial Requirement
- 896
2172
- 502
920
- 558
1 423
-1060
2343
-1432
2550
a. External financing
2/
b. Domestic financing
1 318
854
910
10
1 101
323
2 011
333
1 800
750
1/
1/
2/
Includes external and domestic amortization.
Includes privatization.
26
External debt mainly with governments
and multilateral organizations
Stock of external debt: US$ 19,9 billion.
OUSTANDING EXTERNAL DEBT
AS OF JUNE 2002
Other Bonds
7,2%
Suppliers and
Others
5,4%
M ultilateral
Organizations
34,0%
Brady Bonds
12,6%
P aris Club
40,8%
•Average interest rate 2002: 5,3%
•Average maturity: 8 years
27