Iifperufeb112003

IIF SUMMARY APPRAISAL
PERU
CONFIDENTIAL February 11, 2003

Real GDP
The economy recovered at a rapid 4.9 percent in
(percentage change previous year)
2002 following four years of stagnation. Export-led
5
recovery in the first semester was complemented by
expansionary fiscal and monetary policies resulting in
4
more broad-based economic growth in the second half of
the year. Growth this year is expected to slow, reflecting 3
growing populist pressure in congress and its adverse
2
impact on the investment climate, as well as the need for
fiscal adjustment.
1

The authorities have broadly complied with its 0
1999 2000 2001 2002e 2003f 2004f
economic program supported by the IMF, and economic
performance has been encouraging. Inflation is negligible
and the fiscal deficit, at 2.3 percent of GDP, has been
Domestic Economy and External Trade
declining steadily. The exchange rate has been stable and
2001 2002e 2003f 2004f
even less volatile than that of investment-grade countries
(percent change)
such as Mexico and Chile. We expect Peru’s currency to
Real GDP 0.2 4.9 3.8 4.0
remain roughly constant in nominal terms to the end of
Real domestic demand -0.7 4.3 4.1 3.8
the year.
Change in net foreign
0.9 0.6 -0.2 0.3
balance 1
While the government has maintained pro-market
economic policies, it faces increasing pressure from Alan Consumer prices, end -period -0.1 1.5 2.3 2.9
García’s APRA party that is pushing for more Public sector balance1 2.6 2.3 1.9 1.5
(millions of dollars)
interventionist policies, including elimination of the
Trade balance -90 348 337 302
severely weakened privatization program. If
Merchandise exports 7108 7576 8386 9029
implemented, these policies will negatively impact the
Merchandise imports -7198 -7228 -8049 -8727
investment climate and jeopardize the recovery that is
taking place. The impact of the recently created regional
Current account balance -1169 -1071 -1302 -1441
governments is not likely to translate into fiscal
(% GDP) (-2.2) (-1.9) (-2.2) (-2.3)
weakening in the short run, but it has added to political
(percent change)
noise and contributed to negative business expectations.
Export volume 6.3 2.0 5.6 4.9
Import volume 1.0 -0.7 9.1 6.3
In light of the recent economic performance, we
Terms of trade -2.0 2.7 3.3 0.7
believe GDP growth of 4 to 5 percent can be sustained
over the medium term if the government is able to resist Real effective exchange rate 2 3.8 0.3 1.7 -1.5
pressure on public finances from the new regional Exchange rate, average (New
3.507 3.516 3.525 3.603
governments and those in congress in favor of new Soles/$)3
legislation of a populist nature. If President Toledo is not e = estimate, f = IIF forecast
successful in this endeavor, the country’s 1
Percent of GDP.
2
Relative consumer prices, - = depreciation.
creditworthiness, as reflected in the EMBI+ subindex for
Peru, is likely to widen. Given the strength of these
concerns at present, we project private investment to
• Domestic demand rose by an estimated 4.3 percent in
recover only moderately this year and GDP growth to
2002, as a result of recovery of both consumption and
slow to 3.8 percent before rising to 4 percent in 2004.
investment.
Recent Political and Economic Developments
• Inflation remained low in 2002, only 1.5 percent for
the full year. This was at the lower range of the 1.5
Paralleling the economic recovery, President
to 3.5 percent inflation target set by the central bank.
Toledo’s popularity has increased. His approval rating
has risen from 15 percent in early October to 30 percent at
• The trade and current account balances improved in
present. The president’s rising popularity has dispelled
2002. The current account deficit fell to an estimated
immediate concern that a political crisis would paralyze
$1.07 billion (1.9 percent of GDP) as exports rose
government and disrupt the recovery, although the cloud
faster than imports, and the trade balance shifted
hanging over the political horizon is a reminder that
from deficit to surplus.
undue optimism is not at all warranted.
Copyright © 2003. The Institute of International Finance, Inc. All rights reserved. The contents of this report may be neither reproduced nor distributed
outside the membership in whole or in part without the prior written approval of The Institute of International Finance, Inc.

Summary Appraisal: Peru/Page 2 The Institute of International Finance, Inc

Economic Policies Trade and Current Account Balances
In a difficult political environment characterized by
1000
growing populist opposition in congress, the government
has remained pro-market, continuing to pursue a
macropolicy consistent with economic stability. Peru i s
0
beginning the second year of a stand-by arrangement with
the IMF, and, with the exception of the privatization
program, has largely complied with the agreed-upon -1000
targets.

• -2000
Fiscal policy, which was expansionary in the run-up
1999 2000 2001 2002e 2003f 2004f
to the regional elections in November, was tightened
sharply at the end of the year in order to comply with
Trade Balance Current Account Balance
the IMF fiscal deficit target of 2.3 percent of GDP.
External Debt and Debt Service
• Successful tax collection reforms helped the 2001 2002e 2003f 2004f
government achieve its fiscal target.
External debt 28633 30249 30437 31328
• The central bank adopted an expansionary monetary % GDP 53.0 53.4 50.8 50.1
policy throughout most of 2002 supportive of the % exports2 310.2 311.6 288.9 278.0
economic recovery. The expansionary monetary
Medium-/long-term debt 25588 27352 27743 28539
stance was only briefly interrupted in September and
Short-term debt 3046 2897 2694 2789
October, as the central bank tightened in response to
the adverse market reaction to increased political
International financial 6527 7281 7886 8342
uncertainty in Brazil (the “Lula effect”).
institutions
Official bilateral creditors 9311 9443 8924 8796
• Peru has a flexible foreign exchange regime. With
Commercial banks 3875 3738 3429 3409
only minimal intervention, the country’s currency has
Other private creditors 8921 9787 10199 10782
been among the most stable in Latin America in
recent years. The real effective exchange rate Reserves excluding gold 8672 9548 10048 10648
appreciated by 0.3 percent in 2002. Months of imports 2 9.1 9.8 9.4 9.4
(percent exports)
Outlook and Key Issues Debt service 40.6 40.3 36.2 32.3
Interest payments due 17.2 17.1 15.9 15.3
Amortization due 23.4 23.1 20.3 17.0
We expect the economy to grow 3.8 percent in 2003,
e = estimate, f = IIF forecast
down somewhat from last year. Our projection of
1
Goods, services, and income.
somewhat lower growth this year compared to 2002 is
based on investor concerns regarding fiscal balance
associated with possible increased spending pressure from
production will benefit from the U.S. Andean Trade
regional governments and the negative effects of populist
Promotion and Drug Eradication Act (ATPDEA) that
pressure on privatization and investment. We believe that
came into effect last October. The act grants Peru
the government will undertake the needed fiscal
preferential access to U.S. markets.
adjustment this year despite a difficult political
environment, and this will constrain growth mildly in the
• We project exports to grow by over 10 percent as a
near term. We expect the deficit of the nonfinancial
result of accelerated increases in mineral exports and
public sector to come down to 1.9 percent of GDP this
expansion of nontraditional exports to the U.S. We
year, in line with the agreed-upon IMF target.
expect the current account deficit to increase slightly
to $1.3 billion (2.2 percent of GDP) this year.
Growth in 2003 features continuing recovery of
exports and private investment, but at a more moderate
Questions and comments may be directed to Mr.
pace. Development of the massive Camisea gas project
Julio E. Revilla (tel: 1+202-857-3655, e-mail:
will continue to contribute to economic activity. We
jrevilla@iif.com) or Mr. Frederick Z. Jaspersen (tel:
expect the construction sector to continue to expand,
1+202-857-3608, e-mail: fjaspersen@iif.com). Both may
bolstered by the government’s support of low-cost
be reached via fax (1+202-775-1430).
housing and lower interest rates. Agricultural and textile

IIF COUNTRY REPORT
PERU
CONFIDENTIAL February 11, 2003

This report is based on a mid-January visit to Lima characterized García’s presidency cast a shadow over the
by Julio E. Revilla of the Institute staff. Mr. Revilla met investment climate.
with senior officials of the Ministry of Finance, the
Central Bank of Peru, and the Superintendency of Banks As the populist congress has continued to voice its
and Insurance. He also met with representatives of the opposition to structural reforms and is working to
private banking and nonbanking sectors, and with undermine the stability of the regulatory regime, concerns
economic and political analysts. about investment deepen. While President Toledo has
vetoed a number of radical bills that would have made
Peru’s regulatory environment less pro-business, congress
Recent Political and Economic Developments and even members of Toledo’s own party are threatening
to override a presidential veto. Some of the bills currently
1. President Toledo’s popularity increases, but a under discussion include measures aimed at 1) increasing
populist congress threatens to erode investment and the government’s role in the economy; 2) increasing
economic recovery. workers’ benefits that could have the result of making the
labor market more rigid; and 3) changing privatization
President Toledo’s improved ratings have paralleled procedures to give congress greater authority to determine
the country’s economic recovery. These were given an the content of private contracts. Given this political
additional boost in late October, when opinion polls climate, the private sector is alarmed by what it perceives
registered a 6 percent increase in his approval rating to be a likely return to populist policies.
following his public recognition of an illegitimate
daughter. In the beginning of 2003, an increased number 2. The economy recovered at a faster pace than
of well-staged political appearances increased Toledo’s expected as growth spread from agriculture and
approval rating even further, bringing it close to mining to the rest of the economy.
30 percent.
Following four years of stagnation, Peru’s economy
The president’s moderate but increasing popularity, a recovered at a rapid pace in 2002. The first half of the
change from his exceedingly low approval levels during year was characterized by rapid growth of agriculture and
most of 2002, has dispelled concerns of a political crisis exports, especially mining. In the second half,
that could paralyze the government. While these have expansionary fiscal and monetary policies and the growth
eased, others have surfaced that are leaving an adverse of private investment after four years of contraction
impact on the investment climate. The congress, in which resulted in more broad-based economic growth extending
APRA (Alan García’s party) is strongly represented, has to sectors closely linked to domestic demand including
become increasingly populist in its opposition to private construction, manufacturing and nonexport agriculture
investment. Fiscal uncertainty has also increased (Table 1).
following the creation last year of new regional
governments. Other concerns have focused on President
Toledo’s small power base and his ability to unify a Table 1
Real GDP by Sector
politically fragmented country.
(percentage change from previous year)
2001 2002
The results of the November 17 regional elections
Year Q1 Q2 Q3 Q4 Year
and the victory of the center-left and numerous
independent regional political parties heightened
Total GDP 0.2 2.8 6.1 5.2 5.4 4.9
economic concerns. Former President García’s APRA
party won 12 of the 25 regional presidencies.
Agriculture -0.7 7.5 6.4 1.6 4.7 5.5
Independent regional parties won seven regions, while
Fishing -14.6 -20.8 8.5 7.4 8.0 0.4
President Toledo’s P arty, Perú Posible, won only one
Mining 11.2 25.6 18.6 3.6 6.5 12.6
regional presidency. The remaining five regions were Manufacturing -1.1 -0.8 4.3 5.6 5.2 3.6
split among the Unión por el Perú, Nueva Izquierda, Construction -6.0 10.3 7.9 11.4 4.5 8.4
Somos Perú, and the Frente Independiente Moralizador. Commerce 0.0 0.1 5.1 3.1 4.5 3.3
The elections confirmed that APRA is the strongest Others 0.4 0.7 5.3 5.4 6.5 4.5
opposition party. Even though García pledged that the Source: Central bank, National Statistics Institute and IIF
estimates.
12 regions his party won will be governed responsibly,
concerns about APRA’s populism and the memory of
hyperinflation and the economic meltdown that

Copyright © 2003. The Institute of International Finance, Inc. All rights reserved. The contents of this report may be neither reproduced nor distributed
in whole or in part outside the membership without the prior written approval of The Institute of International Finance, Inc.

Country Report: Peru/Page 2 The Institute of International Finance, Inc.

Despite its mild slowdown in the second half of the policy contributed to a slight increase in the rate of
year, mining (6 percent of GDP) remained the fastest consumer price inflation. For the full year, consumer
growing sector with an estimated 12.6 percent growth for price inflation was 1.5 percent. During the same period,
the full year. The estimated 8.4 percent growth of the wholesale prices rose by 1.7 percent following a
construction sector (5 percent of GDP), fueled by the 2.3 percent contraction in the twelve months ending in
massive Camisea natural gas project, was also propelled June of 2002 (Figure 1).
by the low-cost government-sponsored MIVIVIENDA
Figure 1
and MITECHO housing programs. As private
Consumer Price Index and Wholesale Price Index
consumption recovered, the manufacturing sector
(percent change from previous year)
(15 percent of GDP) rose by an estimated 3.6 percent.
The agricultural sector (9 percent of GDP) rose by about
6
5.2 percent, driven by both a recovery of domestic
CPI Wholesale
consumption and higher export demand.
4
Domestic demand rose steadily during the year,
2
reaching an estimated 6percent year-on-year growth in
the last quarter. Growth for the full year is estimated at
0
4.3 percent. This strengthening of domestic demand was
supported by an increase in consumption and investment
-2
growth, especially in the second half of the year. Private
and public consumption rose by an estimated 4.2 and
-4
3.3 percent, respectively, in 2002. Private investment,
Jan-00 Jan-01 Jan-02 Jan-03
which had contracted during the first half of the year,
accelerated in the second half, growing an estimated
0.7 percent for the year as a whole. To comply with the Fueled by the increased level of economic activity,
fiscal deficit target, public investment (about 20 percent total employment rose by 4.4 percent. The
of the size of private investment) contracted, falling by unemployment rate fell to 8.7 percent by the end of 2002
approximately 5 percent (Table 2). from 8.9 percent a year earlier. The rate of
underemployment (the percentage of people working less
Table 2 than 35 hours per week) remained at about 20 percent.
Real GDP by Expenditure All of these figures are for the city of Lima (about
(percent change from previous year) 35 percent of the population), as national data is
2001 2002e 2003f 2004f unreliable (Figure 2).
GDP 0.2 4.9 3.8 4.0 Figure 2
Unemployment and Underemployment
Domestic demand -0.7 4.3 4.1 3.8 City of Lima
Private consumption 1.3 4.2 3.5 3.0 (3-month moving average)
Public consumption -0.5 3.3 1.8 2.5
23 Unemployment Underemployment
Fixed investment -8.3 -0.4 5.5 4.6
Private -5.6 0.7 6.0 5.0
20
Public -19.0 -5.3 3.0 2.5
Change in stockbuilding1 0.1 1.0 0.4 0.6
17
1
Change in net foreign balance 0.9 0.6 -0.2 0.3
14
Exports of goods and services 6.9 5.8 4.2 6.9
Import of goods and services 1.6 2.2 5.8 5.7
11
1
As a percentage of GDP.
8
Source: Central bank and IIF estimates.
Nov-01 Feb-02 May-02 Aug-02 Nov-02

3. Inflation remains low and unemployment declines.
4. The external trade and current accounts improved
During the first half of the year, inflation fell in as exports rose at a rapid pace.
response to weak domestic demand and appreciation of
Peru’s currency the “New Sol.” In the second half, more The trade and current account balances improved in
rapid economic growth and an expansionary monetary 2002. The current account deficit fell to an estimated

The Institute of International Finance, Inc. Country Report: Peru/Page 3

1.9 percent of GDP in 2002 from 2.2 percent of GDP in rose to an estimated $1.4 billion dollars in 2002 – an
2001. The trade balance shifted to a small surplus increase of 22 percent as average prices rose by about
($0.35 billion) from a slight deficit in 2001, the first 14 percent and volume rose by 8 percent. Despite a
surplus since 1990. The seeming paradox of a shrinking decline of copper prices, copper exports rose by about
current account, despite more rapid growth of the 19 percent as export volume increased more than
economy, is attributable primarily, to the rapid expansion 20 percent with the added production at the large
of merchandise exports (Table 3 and Figure 3). Antamina mining complex.

Table 3 Despite the rise of real GDP in 2002, imports were
External Trade and Current Account reined in by the decline of investment. For the full year,
(billions of dollars) they remained relatively flat with an estimated growth of
2001 2002e 2003f 2004f 0.4 percent from a year earlier. Imports of consumer
goods rose an estimated 10.4 percent in 2002. Imports of
Trade balance -0.1 0.3 0.3 0.3 intermediate goods rose by a more moderate 4.1 percent.
Exports 7.1 7.6 8.4 9.0
Imports of capital goods contracted by 5.4 percent.
Imports -7.2 -7.2 -8.0 -8.7

The existence of a moderate current account deficit,
Balance on services and income -1.1 -1.4 -1.6 -1.7
despite a trade surplus, is the result of a deficit in the
Receipts 2.1 2.1 2.2 2.2
invisibles balance. An increase in import of services and
Payments -4.2 -4.5 -4.7 -4.9
moderately larger interest payments on external debt have
(Interest payments) (-1.6) (-1.7) (-1.7) (-1.7)
more than offset the moderate increase in the export of
Transfers net 1.0 0.9 0.9 1.0
services (including tourism) and the fall in interest
Current account balance -1.2 -1.1 -1.3 -1.4 receipts.
(% of GDP) (-2.2) (-1.9) (-2.2) (-2.3)
5. Foreign direct investment rises and the government
Memoranda: (percent change) once again turns to bonds.
Export volume 6.3 2.0 5.6 1.4
Import volume 1.0 -0.7 9.1 6.3 In 2002, foreign direct investment (FDI) rose to an
Terms of trade -2.0 2.7 3.3 0.7 estimated $2 billion (190 percent of the current account
e = estimate, f = IIF forecast deficit), largely concentrated in the massive Camisea
Source: Central bank and IIF. natural gas project and several mining operations
(Figure 4). This higher-than-expected figure is also
directly related to the investment of a Colombian
Figure 3
conglomerate in Backus – the Peruvian beer monopoly.
Trade and Current Account Balances
Privatization revenues fell to below $200 million.
Despite domestic stock market increases, portfolio
1000
investment fell by an estimated $80 million (Table 4).

Figure 4
0
Foreign Direct Investment

-1000
2400

-2000
1600
1999 2000 2001 2002e 2003f 2004f

Trade Balance Current Account Balance
800

Exports rose an estimated 6.6 percent in 2002 as a
result of a significant increase in gold and copper exports. 0
Exports of gold, Peru’s largest single export in the last 1999 2000 2001 2002e 2003f 2004f
several years (20 percent of total merchandise exports),


Table 4 reserves, which rose by an estimated $0.9 billion in 2002.
External Financing The relative strength and stability of Peru’s currency
(millions of dollars) eliminated the need for the central bank to sell foreign
2001 2002e 2003f 2004f exchange to reduce excessive volatility of the exchange
rate.
Current account balance -1169 -1071 -1302 -1441

Net lending by multilateral creditors continued to be
Equity investment, net 841 1950 1300 1400
strong in 2002 despite net outflows to the IMF and IBRD,
Direct 1063 2030 1400 1500
as the government obtained financing from the IADB and
Portfolio -222 -80 -100 -100
the Corporación Andina de Fomento (CAF) – the
multilateral financing agency of the Andean group. Net
External borrowing, net 246 942 735 914
multilateral lending in 2002 reached an estimated
IMF -153 -173 -106 -35 $532 million, compared to $638 million in 2001. Net
Disbursements 0 0 0 0 lending by bilateral creditors, including officially
Repayments -153 -173 -106 -35 guaranteed private debt and short-term credit, contracted
by an estimated $291 million as payments to the Paris
IBRD 35 -22 249 209 Club remained large.
Disbursements 149 146 350 310
Repayments -114 -168 -101 -101 Net disbursements from other private creditors rose
substantially in 2002 as a direct result of the
Other multilateral creditors 756 727 558 285
government’s decision to issue two new bonds. In
February, the government issued a 10-year, $500 million
Repayments -199 -252 -202 -167
global bond. Following issuance, a swap component was
added whereby $930 million in new global bonds were
Official bilateral creditors -195 -291 -236 -114
issued in exchange for $1,210 million in Brady bonds.
This was the first Peruvian sovereign bond since 1928
Repayments -456 -496 -482 -361
(see the July 31, 2002 Economic Report on Peru for more
Short-term credits, net 22 -20 5 10
details). Eight months later, in November 2002, the
Arrears 0 0 0 0
Discounted debt transactions 0 0 0 0 government reentered the market with a 5-year,
$500 million global bond. The bond was issued at a
Commercial banks -157 -148 -303 -20 612 basis -point-spread above U.S. Treasuries. The
Disbursements 1245 1012 970 980 government had initially indicated that it would use an
Repayments -1052 -980 -1073 -1100 already approved partial credit guarantee (PCG) from the
Short-term credits, net -350 -180 -200 100 CAF to lower the spread; with its improved economic
Arrears 0 0 0 0 performance and declining country risk, however, Peru
Discounted debt transactions 0 0 0 0
was able to secure a competitive interest rate on its own,
without using the PCG. At the end of January 2003, the
Other private creditors -40 849 573 589
government issued a new 12-year, $500 million global
bond at 610 basis points above U.S. Treasuries.
(Bonds and notes) (0) (1000) (0) (0)
Repayments -184 -176 -172 -151
Short-term credits, net 40 -5 -15 80
Table 5
Arrears 0 0 0 0
External Debt
Discounted debt transactions 0 -913 0 0
(millions of dollars, end-period)
1999 2000 2001 2002e
Resident lending abroad, net -199 -653 -232 -273

Total external debt 29605 29204 28633 30249
Errors and omissions 579 -296 0 0

By creditor
Reserves excluding gold
Multilaterals 5922 5952 6527 7281
(- = increase) -298 -876 -500 -600
Official bilateral creditors 10319 10037 9311 9443
Monetary gold (- = increase) 0 5 0 0
Commercial banks 3984 4040 3875 3738
Other private creditors 9380 9175 8921 9787
Source: Central bank and IIF.
e = estimate
Source: Central bank, Ministry of Economy and Finance, and IIF
Peru’s trade surplus, the strength of its financial estimates.
system, and the government’s return to the international
capital markets bolstered the country’s international


In 2001, total ext ernal debt fell slightly to Domestic stock market prices rose strongly in the
$28.6 billion due in part to the exchange rate valuation fourth quarter following a disappointing first three
adjustment as the dollar appreciated against the yen and quarters. The recovery in the last quarter followed the
European currencies. In 2002, external debt increased to trends in world stock markets, but outpaced them by a
an estimated $30.2 billion. This was, in part, the wide margin. By the end of the year, the General Lima
consequence of a weakening dollar, but was also due to Index had risen 18.3 percent in local currency terms and
the government’s heavier reliance on external borrowing 16 percent in dollar terms from a year earlier (Table 6).
to cover its financial needs (Table 5).
The rally in the fourth quarter was the result of
The external debt service ratio fell from 44 percent in better-than expected commodity prices and the rapid
2000 to 40.3 percent at the end of 2002. Despite t e h growth of the mining sector. The stock market also
almost 4 percent drop, external debt service remained benefited from the bidding war over Peru’s beer
relatively high (compared to 2002 estimates of 26 percent monopoly and its final buyout by a Colombian
in Chile, 14 percent in Mexico and Venezuela, and conglomerate. Nevertheless, market capitalization
27 percent in Ecuador). remains a modest $12.6 billion (22 percent of GDP).

6. The stock market rallies following a disappointing 7. The banking sector remains strong and highly
first three quarters. liquid.

Table 6 The banking sector’s performance has improved
Financial Sector Indicators steadily following the asset deterioration that peaked in
(millions of new soles and percentages of GDP) 1 2000. The financial sector as a whole has strengthened
2000 2001 2002e and it continues to consolidate. There are now 14 banks
compared to 26 three years ago. Nonperforming loans
Banking credit to the private sector 47361 45158 45866
fell to 7.8 percent of total assets by the end of 2002,
(% GDP) (25.4) (23.8) (23.0)
compared to 9.7 percent a year earlier. As banks finished
In New Soles 8777 8841 9286
complying with banking regulations governing prudential
(% GDP) (4.7) (4.7) (4.7)
supervision, the ratio of provisions against nonperforming
In dollars 38584 36318 36580
loans climbed to more than 120 percent.
(% GDP) (20.7) (19.2) (18.4)

Despite the increased strength of the Peruvian
Banking sector deposits 40647 41367 43321
banking sector, concern remains that the uncertainty
(% GDP) (21.8) (21.8) (21.7)
In New Soles 7958 9303 10168 plaguing banks operating elsewhere in Latin America will
(% GDP) (4.3) (4.9) (5.1) spill over into Peru. The Argentine crisis prompted the
In dollars 32689 32064 33154 Spanish Banco Santander Central Hispano (BSCH) to sell
(% GDP) (17.5) (16.9) (16.6) its Peruvian operations to Banco de Crédito (Peru’s
largest bank), increasing the latter’s share to 37 percent of
Bad loans/ bank credit (% )2 10.2 9.0 7.6 total deposits and 34 percent of total loans. In a
Provisions/ bank credit (%)3 9.0 10.5 9.1
subsequent move, the Italian owners of Banco Wiese
(Bad loans-provisions)/bank
Sudameris announced their plans to retire from Latin
credit (%) 1.2 -1.4 -1.5
America, including Peru. The announcement produced a
minor run on the bank which was successfully contained.
Lima Stock Exchange General Index 1208 1176 1392
New Sol (% change from previous
period) -34.2 -2.6 18.3
Economic Policies
Dollar (% change from previous
period) -34.5 -0.3 16.0
In a difficult political environment characterized by
Private pension funds (AFPs): growing opposition in congress, the government has
Stock value 9599 12350 15906 remained pro-market and has continued to manage fiscal
(% GDP) (5.1) (6.5) (8.0)
policy in a prudent fashion except during the run-up to the
1
Dollar deposits valued at the end-period exchange rate.
elections in November. Peru is beginning the second year
Excludes central bank and Banco de la Nación.
of a stand-by arrangement with the IMF and, with the
2
Past-due loans plus refinanced loans.
exception of the privatization program, has largely
3
Provisions for bad-performing loans.
complied with the agreed-upon targets.
Source: Central bank and Superintendency of Banks and
Insurance.


1. The fiscal deficit narrows, but further fiscal likely issuing an additional $500 million bond during the
adjustment is needed. year. In anticipation, the government has included in this
year’s budget an authorization to issue global bonds up to
In the run-up to the November regional elections, $1 billion. We believe the government will have no
there were fiscal slippages, and midyear estimates placed difficulty accessing international capital markets for this
the nonfinancial public sector (NFPS) deficit at amount.
2.8 percent of GDP, against the target of 1.9 percent
Table 7
under the IMF program (the NFPS deficit is the
Public Sector Finances
equivalent of the public sector borrowing requirement, or
(percent of GDP)
PSBR, presented in the database tables attached to this
1999 2000 2001 2002e
report). With a view to bring fiscal policy back on track,
the government and the IMF began to negotiate a possible
Central government balance -3.1 -2.7 -2.8 -2.5
revision to the fiscal deficit target, and the government
Primary balance -1.0 -0.6 -0.6 -0.4
started to take measures to reverse the weakening fiscal
performance. In early December an agreement was Total revenue 14.8 15.0 14.3 14.3
reached to revise the target to 2.3 percent of GDP (Taxes) (12.5) (12.1) (12.3) (11.9)
(postponing the target of 1.9 percent until 2003).
Total expenditure 18.0 17.7 17.0 16.7
Measures taken to cut spending took many forms, Current expenditure 14.6 14.9 14.7 14.9
including the shutdown of most government offices for a (Interest payments due) (2.1) (2.2) (2.1) (2.1)
(Other current expenditure) (12.5) (12.7) (12.6) (12.8)
good part of December. There were also major efforts to
Capital expenditure 3.4 2.8 2.3 1.8
strengthen tax collection in the second half of the year.
Accordingly, total taxes in the second half of the year rose
Other nonfinancial public sector
by 6.6 percent from the same period a year earlier
balance 0.0 -0.5 0.2 0.2
(5.7 percent in real terms), while for the year as a whole
Primary balance 0.1 -0.4 0.3 0.2
they rose 1.7 percent. Revenues from the value-added tax
rose by 18 percent in the second half of 2002 compared to
Nonfinancial public sector
a year earlier, while for the year as a whole revenues for balance -3.1 -3.2 -2.6 -2.3
the value-added tax rose 9.3 percent (Table 7).
Primary balance -1.0 -1.0 -0.3 -0.2
(Interest payments) (2.2) (2.3) (2.2) (2.1)
The government was finally able to achieve a more
moderate fiscal deficit, thanks largely to the recovery of Financing of public sector 3.1 3.2 2.6 2.3
balance
domestic demand, successful tax collection reforms and
the resulting increase in revenues. As a consequence, the External financing -0.1 1.2 0.9 1.2
NFPS deficit for 2002 fell to 2.3 percent of GDP. This Domestic financing 2.4 1.2 1.0 0.8
Privatization receipts 0.8 0.8 0.6 0.3
compares to 2.6 percent of GDP in 2001 and 3.2 percent
e = estimate
in 2000.
Source: IIF based on data from the Ministry of Economy and
Finance.
Given the 2003 fiscal deficit target of 1.9 percent of
GDP ($1.1 billion) and public sector debt amortization of
2. Expansionary monetary policy fuels the recovery
$1.6 billion, the government’s gross financing
while inflation ends the year in the lower range of the
requirements for 2003 are estimated at $2.7 billion. The
inflation target.
government estimates that $1.1 billion of this will come
from multilateral sources, $0.7 billion from international
In January 2002, the central bank formally introduced
bond issues, $0.5 billion from domestic bonds and
an inflation-targeting framework. The inflation target for
$0.4 billion from privatizations and concessions.
2003 was set similar to that of 2002, at 2.5 percent with
an accepted deviation of 1 percent above and below the
Multilateral financing through the IADB and the
target. At 1.5 percent, the 2002 inflation rate was at the
CAF is virtually assured, but not likely to rise further.
lower limit of the target.
The government is also not likely to easily increase its
domestic bond issuance since the market for New
The monetary policy of the central bank is now based
Sol-denominated government bonds is very thin.
on announcements of future interest rates. The central
Importantly, while the government is still hoping to cover
bank sets a range for interbank interest rate fluctuations
a good part of its financing needs from privatization
using the monetary regulation interest rate as an upper
receipts, we estimate that it will only be able to raise
limit and the overnight interest rate as a lower limit. The
about $0.2 billion from this source. This will force it to
authorities now announce their monetary policy on a
increase its reliance on the international capital markets,


monthly basis in accordance with a fixed and pre- firms and consumers pay interest rates above 50 percent
established schedule. In addition, the central bank (Table 9).
publishes a detailed inflation report three times a year.
Table 9
Interest Rates
Throughout most of 2002, the central bank adopted
(annual rates)1
an expansionary monetary policy. The policy set
90 day Lending
progressively higher limits on bank rediscount facilities
Inter- Lending Deposit2 Lending2 Lending Dollar
and supported the steady fall of interbank interest rates.
bank Prime (Tipmn) (TAMN) Real 3 (Tamex)
The expansionary monetary policy was reversed only
briefly in September-October, when the “Lula effect”
1999 14.9 n.a. 11.8 35.0 30.5 16.5
increased Peruvian country risk and that of most countries 2000 12.7 n.a. 9.8 30.0 25.3 13.7
in Latin America. Liquidity increased in 2002. Broad 2001 8.6 5.2 7.5 25.0 22.5 12.1
money (M2) rose by an estimated 8 percent from a year 2002 3.2 2.7 3.5 20.8 20.6 10.0
earlier. Net d omestic credit as a percentage of broad
money also recovered to grow at 3.1 percent in 2002, 2002
Q1 2.6 2.9 4.1 22.1 23.4 10.0
compared to a rise of 0.9 percent a year earlier (Table 8).
Q2 2.5 2.8 3.2 19.9 19.8 10.0
By early January, the central bank had once again eased
Q3 3.7 2.7 3.2 19.9 19.6 10.1
monetary policy by reducing monetary regulation interest
Q4 4.1 2.5 3.7 21.1 19.4 10.1
rates from 4.5 to 4.25 percent.

Oct 4.6 2.7 3.7 20.7 19.1 10.0
Table 8
Nov 3.9 2.4 3.7 21.8 20.1 10.1
Factors Affecting Liquidity
Dec 3.8 2.4 3.6 20.7 18.9 10.2
(change as a percent of broad money, end of previous period)
1999 2000 2001 2002e
2003
Jan 3.7 2.3 3.5 20.3 17.6 10.1
Net foreign assets 10.2 1.9 3.4 7.7
1
Average monthly rates.
2
Average rates for deposits and lending in local currency.
Net domestic assets 4.2 -2.3 -1.3 0.3
3
Average rates for lending in local currency deflated by the CPI
inflation.
Domestic credit 14.9 -0.2 0.9 3.1
Source: IIF based on data from the central bank.
Claims on public sector, net 8.5 2.5 4.3 -1.3
Claims on private sector 6.4 -2.7 -3.4 4.4

Other assets. net -10.7 -2.1 -2.2 -2.8 Table 10
Exchange Rate Developments
Broad money (M2)1 14.5 -0.4 2.1 8.0 (period averages)
Money (M1)1 5.9 -2.0 0.3 3.5 Real Exchange Rate 1
New
Quasi-money 8.6 1.6 1.7 4.6 % Change2
Soles/$ Index 1995=100

Memoranda: 1999 3.38 90.7 -8.9
M2 (% of GDP) 34.4 32.1 32.3 33.2 2000 3.49 90.3 -0.5
M2 (% in dollars) 53.7 55.1 53.2 51.2 2001 3.51 93.7 3.8
M1 (% of GDP) 12.7 11.3 11.2 11.8 2002 3.52 94.0 0.3
e = estimate
1
Includes domestic and foreign currency holdings. 2002
Source: IIF based on data from the IMF and the central bank. Q1 3.46 94.4 -1.7
Q2 3.46 94.2 -0.2
Q3 3.57 92.6 -1.8
Market interest rates both in nominal and real terms
Q4 3.57 94.8 2.5
declined steadily during 2002, following the same pattern
of a year earlier. Although the average lending interest
2003
rate in domestic currency (TAMN) remained relatively
Jan 3.49 96.14 1.4
high at about 20 percent, the prime rate for corporations 1
Based on trade with six main trading partners and consumer
fell to approximately 2percent. The large variance in
prices (- = depreciation).
interest rates is explained by considerable dispersion of 2
Changes with respect to previous period.
risk in the credit market and the lack of a well-established
institutional framework for property rights, which
contributes to large risk premiums. As a result, smaller


Outlook
3. The exchange rate appreciates slightly.

The central bank adopted a flexible exchange rate We project the economy to grow by 3.8 percent in
regime in the early 1990s. In the context of an inflation 2003, down from an estimated 4.9 percent last year. Our
target, it does intervene, however, to moderate exchange estimate of somewhat lower growth this year compared to
rate volatility. In 2002, thanks to the relative strength of 2002 is based on uncertainties associated with the impact
the New Sol, the bank’s exchange rate interventions were on public finances of the newly created regional
limited. Despite pressures of contagion from Brazil in the governments and the negative effects of rising populism
third quarter of the year, the real effective exchange rate in congress. We expect growth to be negatively affected
appreciated by 0.3 percent during 2002 compared to a by El Niño as a consequence of a change in the pattern of
year earlier. In nominal terms, the New Sol depreciated rainfall. While it will not be affected as strongly as it was
against the dollar by 0.3 percent during 2002 as an in 1998, when fishing contracted by 13 percent, heavy
average and by 2.2 percent from December 2001 to rainfall has already had an adverse impact on agricultural
December 2002 (Table 10 and Figure 5). production. Finally, we believe that the government will
have to address its need for additional fiscal adjustment
Figure 5 and expect this to mildly constrain higher growth in the
Real Effective Exchange Rate near term.
(1995 = 100)
100 In our projections, economic growth in 2003 will be
led by a modest recovery of investment and continued
strength of exports. The continuing development of the
massive Camisea gas project also supports growth. The
95
construction sector is expected to grow rapidly, boosted
by government support of low-cost housing programs and
low interest rates. Agricultural and textile exports and
90
production will benefit from the U.S. Andean Trade
Promotion and Drug Eradication Act (ATPDEA) that
came into effect last October. The accord grants Peru
85
preferential access to the U.S. market for agricultural,
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03
textile and some manufactured exports (Table 11).
From 2001 to 2002, the New Sol was one of the most
stable currencies in Latin America. This is not We expect inflation to reach 2.3 percent for 2003, in
necessarily a reflection of changes in Peru’s country risk, the lower range of the inflation target, based on continued
which has been closely correlated with that of other Latin strength of the domestic currency and moderate pressures
American countries. The relative stability of the domestic from domestic demand.
currency seems to be explained more by the central
bank’s commitment to low inflation and the growth of We project the current account deficit to increase
Peru’s international reserves. The latter has been driven slightly to $1.3 billion (2.2 percent of GDP) this year,
by a strong trade balance and large capital inflows reflecting a weakening of the invisibles balance. The
(Figure 6). trade balance is projected to remain at about the same
level as last year. We estimate exports to grow by nearly
Figure 6 11 percent in response to the continued increase in
Average Exchange Rate mineral exports and the expansion of nontraditional
(July 2001 = 100) exports to the U.S. market, thanks to the ATPDEA.
Imports of capital goods are expected to increase also by
120 about 11 percent in response to investment recovery and
Peru Chile Mexico
the construction of the Camisea gas project. In 2004, we
115 project a trade surplus of about $300 million and a current
account deficit of $1.4 billion (2.3 percent of GDP).
110
We expect the deficit of the nonfinancial public
105 sector to be brought down to 1.9 percent of GDP this
year, in line with the target agreed with the IMF. The
100 authorities’ expressions of their commitment have been
encouraging in this context. The recent administrative
95 reforms of the tax agency (SUNAT) have proven to be
Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 effective in increasing fiscal revenue and we expect this


to continue and contribute to fiscal adjustment. We As indicated above, a serious risk we see in an
believe the government will be successful in containing otherwise rather favorable economic situation and outlook
political pressure for increased expenditures from the is the political climate. Although President Toledo has
newly elected regional governments and will meet its remained pro-market, the populist congress is increasing
fiscal and other targets agreed w the IMF. In these
ith its opposition to structural reforms. This could adversely
circumstances we expect the government to continue to affect the country’s investment climate and weaken the
access international capital markets to meet its external current recovery. Congress, including Toledo’s party, is
needs. likely to adopt a more populist position closer to that of
Alan García’s APRA party. The same is true with the
Table 11 regional governments. Hopefully, these initial positions
Forecast Summary will become more moderate as APRA attempts to
2001 2002e 2003f 2004f demonstrate that it c govern effectively at the regional
an
level before the campaign for the 2006 presidential
Real GDP (% change) 0.2 4.9 3.8 4.0 elections begins in earnest.
Consumer prices
We believe that the economy should be able to grow
(% change, end -period) -0.1 1.5 2.3 2.9
at a 4 to 5 percent annual rate over the medium term if the
government is able to successfully control fiscal pressures
Nonfinancial public sector
coming from the new regional governments, prevent
balance -2.6 -2.3 -1.9 -1.5
congress’s populist tendencies from being reflected in
NFPS primary balance -0.3 -0.6 -0.1 0.0
new anti-business legislation, and reestablish a strong
Central government balance -2.8 -2.5 -2.0 -1.7
program to attract private sector investment. The
Trade balance ($ billion) -0.1 0.3 0.3 0.3 unfolding political trend in the next 9 to 12 months needs
Merchandise exports 7.1 7.6 8.4 9.0 to be closely watched before coming to a judgment on
Merchandise imports -7.2 -7.2 -8.0 -8.7 whether indeed the Peruvian economy will be in a
position to exploit its potential through good policies.
Current account
-2.2 -1.9 -2.2 -2.3
(% of GDP)

Reserves excluding gold
($ billion) 8.7 9.5 10.0 10.6

Total external debt
($ billion) 28.6 30.2 30.4 31.3

Amortization due
($ billion) 2.2 2.2 2.1 1.9

11-Feb-03
IIF DATABASE: PERU
Page 1

Code 1997 1998 1999 2000 2001 2002e 2003f 2004f
DOMESTIC ECONOMY & EXTERNAL TRADE

DOMESTIC ECONOMY (1994 prices)

E100 Real GDP (new soles million) 117110 116485 117590 121267 121513 127468 132311 137604
E101 Real GDP % change 6.7 -0.5 0.9 3.1 0.2 4.9 3.8 4.0
E201 Domestic demand % change 6.9 -0.8 -3.1 2.4 -0.7 4.3 4.1 3.8
E211 Private consumption % change 4.3 -0.8 -0.4 3.9 1.3 4.2 3.5 3.0
E221 Public consumption % change 7.6 2.5 3.5 5.1 -0.5 3.3 1.8 2.5
E231 Gross fixed capital % change 15.3 -1.4 -11.1 -5.0 -8.3 -0.4 5.5 4.6
E241 Private fixed capital % change 16.3 -2.4 -15.3 -2.0 -5.6 0.7 6.0 5.0
E251 Public fixed capital % change 10.9 3.0 7.2 -15.4 -19.0 -5.3 3.0 2.5
E262 Change in stockbuilding % GDP 0.0 -0.1 -0.6 0.3 0.1 1.0 0.4 0.6

E301 Exports of goods and services % change 13.1 5.6 7.6 7.9 6.9 5.8 4.2 6.9
E311 Imports of goods and services % change 12.2 2.3 -15.2 3.6 1.6 2.2 5.8 5.7
E322 Change in net foreign balance % GDP -0.5 0.3 4.2 0.7 0.9 0.6 -0.2 0.3

E400 Real GNP (new soles million) 114170 113337 114011 117817 118681 123924 129012 134267
E401 Real GNP % change 7.2 -0.7 0.6 3.3 0.7 4.4 4.1 4.1

E500 Nominal GDP (new soles million) 157274 166514 174719 186756 189533 199202 211181 225344
E501 Nominal GDP % change 14.9 5.9 4.9 6.9 1.5 5.1 6.0 6.7
E505 GDP deflator % change 7.6 6.4 3.9 3.6 1.3 0.2 2.1 2.6
E510 Nominal GDP ($ billion) 59.03 56.83 51.64 53.54 54.05 56.65 59.92 62.55

E600 Nominal GNP (new soles million) 153313 161964 169368 181404 185051 193585 205839 219801
E601 Nominal GNP % change 15.4 5.6 4.6 7.1 2.0 4.6 6.3 6.8
E605 GNP deflator % change 7.6 6.4 4.0 3.6 1.3 0.2 2.1 2.6
E610 Nominal GNP ($ billion) 57.5 55.3 50.1 52.0 52.8 55.1 58.4 61.0

E701 Average nominal earnings % change 7.5 5.0 1.4 4.3 0.8 1.6
E801 Industrial production % change 5.9 -3.5 -0.3 7.3 -1.7 3.8

EXTERNAL TRADE

T103 Goods exports: volume % change 16.5 -5.3 15.2 11.4 6.3 2.0 5.6 4.9
T105 Goods exports: unit value % change -0.6 -11.0 -7.8 3.2 -4.9 3.8 5.5 2.7

T203 Goods imports: volume % change 11.9 0.9 -18.4 3.4 1.0 -0.7 9.1 6.3
T205 Goods imports: unit value % change -3.1 -4.7 0.6 5.4 -3.0 1.1 2.1 2.0

T305 Terms of trade % change 2.5 -6.6 -8.3 -2.1 -2.0 2.7 3.3 0.7

T400 Exchange rate, end-period (S/$) 2.730 3.160 3.510 3.527 3.444 3.514 3.556 3.642
T410 Exchange rate, average (S/$) 2.664 2.930 3.383 3.488 3.507 3.516 3.525 3.603
T420 Parallel rate, end-period (S/$)

T430 Nominal effective rate (1995 = 100) 92.2 86.4 77.6 76.9 87.2 82.8 84.6 83.2
T440 Real effective rate (1995 = 100) 101.6 99.6 90.7 90.3 93.7 94.0 95.6 94.2
T441 Real effective rate % change -0.3 -1.9 -8.9 -0.5 3.8 0.3 1.7 -1.5


11-Feb-03
IIF DATABASE: PERU
Page 2

Code 1997 1998 1999 2000 2001 2002e 2003f 2004f
EXTERNAL BALANCE ($ million)

B100 Trade Balance -1721 -2466 -631 -317 -90 348 337 302

B110 Merchandise exports 6832 5757 6119 7034 7108 7576 8386 9029
B120 Merchandise imports -8553 -8222 -6749 -7351 -7198 -7228 -8049 -8727

B200 Balance on Services, Income & Transfers -1353 -1174 -1288 -1335 -1079 -1419 -1640 -1743

B210 Services & income receipts 2279 2562 2229 2318 2122 2133 2151 2239
B212 Exports of services 1538 1748 1578 1580 1489 1686 1587 1638
B214 Interest receipts 585 632 522 592 519 337 451 489
B216 Other services & income receipts 156 182 128 147 114 110 113 112

B220 Services & income payments -4533 -4648 -4510 -4646 -4200 -4472 -4721 -4932
B222 Imports of services -2305 -2281 -2278 -2373 -2289 -2428 -2641 -2792
B224 Interest payments -1621 -1784 -1744 -1809 -1586 -1664 -1680 -1720
B226 Other services & income payments -607 -582 -488 -464 -325 -380 -400 -420

B230 Transfers, net 901 912 994 993 999 920 930 950
B232 Private transfers, net 770 780 867 863 869 791 800 821
B234 Official transfers, net 131 132 127 130 130 129 130 129

B250 Current Account Balance -3074 -3640 -1919 -1651 -1169 -1071 -1302 -1441

B252 % GDP -5.2 -6.4 -3.7 -3.1 -2.2 -1.9 -2.2 -2.3

F280 Equity investment, net 1764 1365 1533 410 841 1950 1300 1400

F300 International financial institutions 1009 206 540 123 638 532 701 459
F310 IMF 147 -145 -146 -141 -153 -173 -106 -35
F320 IBRD 425 207 291 174 35 -22 249 209
F330 Other multilateral creditors 437 144 395 90 756 727 558 285

F340 Official bilateral creditors -1029 -117 -60 306 -195 -291 -236 -114

F350 Commercial banks -4357 277 -1042 63 -157 -148 -303 -20
F351 Credit flows 6434 286 -1042 63 -157 -148 -303 -20
F354 Interest arrears -6139 -9 0 0 0 0 0 0
F358 Discounted debt transactions -4652 0 0 0 0 0 0 0

F360 Other private creditors 5348 357 -11 6 -40 849 573 589
F361 Credit flows/interest arrears 5930 357 -11 6 -40 1762 573 589

F400 Resident lending abroad, net 698 350 -273 -336 -199 -653 -232 -273

F450 Errors and omissions, net 44 -210 397 723 579 -296 0 0

F480 Monetary gold (- = increase) 0 -4 0 0 0 5 0 0
F500 Reserves excluding gold (- = increase) -404 1417 835 356 -298 -876 -500 -600


11-Feb-03
IIF DATABASE: PERU
Page 3

Code 1997 1998 1999 2000 2001 2002e 2003f 2004f
EXTERNAL DEBT AND ASSETS ($ million)

D100 Total External Debt 29103 30330 29605 29204 28633 30249 30437 31328
D102 % GDP 49.3 53.4 57.3 54.5 53.0 53.4 50.8 50.1
D105 % Exports goods, services & income 319.4 364.6 354.7 312.3 310.2 311.6 288.9 278.0

D202 Medium/Long term debt 24492 25928 26216 25911 25588 27352 27743 28539
D203 Short term debt 4518 4361 3348 3293 3046 2897 2694 2789
D204 Interest arrears 93 40 40 0 0 0 0 0

By creditor:
D300 International financial institutions 5177 5497 5922 5952 6527 7281 7886 8342
D304 (Interest arrears) 0 0 0 0 0 0 0 0
D310 IMF 1011 905 735 558 387 236 124 88
D320 IBRD 1920 2128 2417 2590 2625 2609 2824 3033
D330 Other multilateral creditors 2246 2464 2770 2804 3515 4436 4938 5222

D340 Official bilateral creditors 10344 10497 10319 10037 9311 9443 8924 8796

D350 Commercial banks 4722 5023 3984 4040 3875 3738 3429 3409
D352 Medium/long term 1561 2110 2223 2479 2664 2707 2599 2478
D353 Short term 3121 2873 1720 1560 1210 1030 830 930
D354 Interest arrears 40 40 40 0 0 0 0 0

D360 Other private creditors 8861 9313 9380 9175 8921 9787 10199 10782
By borrower: 29103 30330 29605 29204 28633 30249
D400 Public sector 19305 19900 19851 19624 19523 21037
D410 Private sector 6337 7149 7467 7549 7544 7722
D420 Deposit money banks 3461 3281 2286 2032 1566 1490

D508 Face amount discounted debt reduction -4760 0 0 0 0 -280 0 0
D558 Commercial banks -3878 0 0 0 0 0 0 0
D578 Other creditors -881 0 0 0 0 -280 0 0

D600 $ Exchange rate valuation effect -1360 504 -152 -898 -817 954 -547 -22
D610 % Total external debt in $ 63.1 61.4 60.9 61.6 62.7 70.2 70.7 71.0

EXTERNAL ASSETS ($ million)

A500 Reserves excluding gold 10982 9565 8730 8374 8672 9548 10048 10648
A505 % Imports goods, services, & income 83.9 74.3 77.5 69.8 76.1 81.6 78.7 78.0
A506 Months imports goods, services & income 10.1 8.9 9.3 8.4 9.1 9.8 9.4 9.4

A510 Gold value 322 336 320 300 306 383
A512 Gold (million ounces) 1.115 1.100 1.100 1.100 1.100 1.115

A600 Deposit money banks' foreign assets 1216 1246 1389 1299 1366
A700 Deposits in BIS banks 7200 6652 7197 6975 7600

11-Feb-03
IIF DATABASE: PERU
Page 4

Code 1997 1998 1999 2000 2001 2002e 2003f 2004f
DEBT SERVICE PAYMENTS ($ million)

P100 Total debt service 3634 3722 3760 4117 3744 3909 3816 3635
P105 % Exports goods, services & income 39.9 44.7 45.0 44.0 40.6 40.3 36.2 32.3

P110 Interest payments due 1621 1784 1744 1809 1586 1664 1680 1720

P120 Amortization paid 2013 1938 2016 2308 2158 2245 2136 1915

P204 Average interest rate on external debt 5.1 6.0 5.8 6.2 5.5 5.7 5.5 5.6
P214 Average real rate on external debt 5.8 19.1 14.7 2.9 10.9 1.8 0.0 2.8

2003 2004 2005 2006 2007
AMORTIZATION

R100 Total principal repayments due 2136 1915 1458 1384 1911

R110 IMF 106 35 36 37 18
R120 IBRD 101 101 83 85 92
R130 Other multilateral creditors 202 167 161 159 161
R140 Official bilateral creditors 482 361 353 349 357
R150 Commercial banks 1073 1100 674 600 625
R160 Other private creditors 172 151 151 154 658

1997 1998 1999 2000 2001 2002e 2003f 2004f
WORLD ECONOMIC FRAMEWORK

W101 Industrial country real GDP % change 3.19 2.31 2.85 3.53 0.72 1.47 2.14 2.87
W204 $ LIBOR (six-month, average) 5.85 5.54 5.54 6.65 3.73 1.91 2.81 3.72
W304 Brent spot oil price ($/bbl, average) 19.12 12.72 17.70 28.31 24.41 24.79 24.50 18.00

W410 SDR/$, end-period 0.74 0.71 0.73 0.77 0.80 0.74 0.76 0.76
W420 Euro(Ecu)/$, end-period 0.91 0.86 1.00 1.07 1.13 0.95 1.00 1.00
W430 Yen/$, end-period 129.95 115.60 102.20 114.90 131.80 118.70 129.50 130.00

W505 World price commodities % change -3.31 -14.75 -6.90 1.71 -5.25 2.84 7.68 2.55
W515 World price manufactured goods % change -4.68 -3.70 -2.47 -3.52 -2.09 1.80 2.02 -0.06

W603 Export market volume % change 11.5 5.7 5.6 11.2 -1.2 2.0 6.7 7.2
W615 Trading partners' $ prices % change 0.3 -0.4 -1.8 1.1 -2.2 -0.4 0.2 1.9

COUNTRY TRADE BY COMMODITY

Exports:
C100 Copper ($ million) 1096 779 776 933 987 1178
C102 Volume (thousand tons) 501 486 521 529 686 850
C103 Volume % change 5.4 -3.0 7.1 1.5 29.6 23.9

C104 Unit price ($/lb) 1.03 0.75 0.71 0.82 0.72 0.71
C105 Unit price % change -0.8 -27.3 -4.9 15.3 -12.9 -1.2

C200 Fishmeal 1031 392 533 874 835 772
C202 Volume (thousand metric tonnes) 1926.3 666.2 1482.0 2352.3 1942.0 1420.0
C203 Volume % change 19.7 -65.4 122.5 58.7 -17.4 -26.9

C204 Unit price ($/tm) 535.16 588.38 359.53 371.55 430.01 546.01
C205 Unit price % change 3.2 9.9 -38.9 3.3 15.7 27.0


11-Feb-03
IIF DATABASE: PERU
Page 5

Code 1997 1998 1999 2000 2001 2002e 2003f 2004f
GOVERNMENT & MONETARY SECTORS

GOVERNMENT SECTOR (new soles million)
G100 Public sector borrowing requirement -253 1329 5482 6044 4833 4550 4030 3400
G102 Public sector borrowing % GDP -0.2 0.8 3.1 3.2 2.6 2.3 1.9 1.5

G106 Financed by domestic credits 337 687 5593 3758 3078 1514
G107 Financed by external credits -591 642 -111 2286 1755 3036
G300 Central government borrowing 1325 1791 5499 5119 5264 4946
G302 Central government borrowing % GDP 0.8 1.1 3.1 2.7 2.8 2.5

G306 Financed by domestic credits 1313 1230 5812 3022 3282 1818
G307 Financed by external credits 12 561 -313 2097 1982 3128

G310 Central government revenue 25193 26707 25872 27944 27039 28408
G311 Central government revenue % change 14.0 6.0 -3.1 8.0 -3.2 5.1
G312 Central government revenue % GDP 16.0 16.0 14.8 15.0 14.3 14.3

G320 Central government expenditure 26518 28498 31371 33063 32303 33354
G321 Central government expenditure % change 10.4 7.5 10.1 5.4 -2.3 3.3
G322 Central government expenditure % GDP 16.9 17.1 18.0 17.7 17.0 16.7

G500 General government debt 22666 23569 23505 24249 24687 26327
G502 General government debt % GDP 38.4 41.5 45.5 45.3 45.7 46.5

G510 General government domestically issued debt 4350 4550 4815 5044 5720 5840
G520 General government foreign issued debt 18316 19019 18690 19205 18967 20487

MONETARY SECTOR (new soles million)
M100 Net foreign assets 24119 25111 30490 31652 33681

M200 Domestic credit 29784 39869 47717 47579 48109
M201 Domestic credit % change 73.4 33.9 19.7 -0.3 1.1

M210 Claims on the public sector -8028 -5966 -1504 10 2579
M250 Claims on the private sector 37812 45835 49221 47569 45530

M300 Other liabilities 9142 12462 18079 19344 20660

M400 Money + quasi-money (M2) 44762 52518 60127 59887 61131
M401 M2 % change 30.8 17.3 14.5 -0.4 2.1
M411 M2 velocity % change -12.2 -9.8 -8.4 7.3 -0.6

M500 Money (M1) 15175 19165 22273 21072 21278
M501 M1 % change 69.1 26.3 16.2 -5.4 1.0

M600 Reserve money 4761 5023 5876 5642 5883
M601 Reserve money % change 19.1 5.5 17.0 -4.0 4.3

M805 Consumer prices % change average 8.5 7.2 3.5 3.8 2.0 0.2 2.1 2.6
M815 Consumer prices % change end-period 6.5 6.0 3.7 3.7 -0.1 1.5 2.3 2.9

FINANCIAL MARKETS
K101 General Lima Index, new sol terms % change 25.5 -25.5 37.4 -34.2 -2.6 18.3

K111 General Lima Index, $ terms % change 19.5 -35.6 23.7 -34.5 -0.3 16.0

K120 Equity market capitalization ($ billion) 17.4 11.0 13.4 10.5 10.9 12.6
K130 Equity market turnover ($ billion) 12.1 7.7 4.7 3.6 3.4 2.9

K200 Interbank rate 12.8 18.7 14.9 12.7 8.6 3.2
K210 Lending rate 30.9 32.6 35.0 30.0 25.0 20.8
K220 Deposit rate 10.3 10.9 11.8 9.8 7.5 3.5
K230 Real deposit rate 1.6 3.4 8.0 5.8 5.4 3.3


Iifperufeb112003

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (9)

Semelhante a Iifperufeb112003

Semelhante a Iifperufeb112003 (20)

Mais de G Garcia

Mais de G Garcia (20)

Último

Último (20)

Iifperufeb112003