Peru stocks trade as a rare commodity
Benefits from improving commodities strength, Fastest growing economy in Latin America
As economies around the world try to recover from the international financial crisis, global investors are starting to regain their appetites for investments abroad. Emerging markets are bouncing back and Peru is leading the way. The Lima general index has been the world’s best-performing stock market this year, having surged 107.1% in US dollar terms by the end of July.
Holding on to its position as one of the best-managed and fastest-growing Latin American economies, Peru has weathered the global financial crisis much better than most countries in the region and worldwide. In contrast with global trends, Peru is not expected to post a contraction in GDP this year but rather to continue growing at a relatively strong 3.5%, an economic expansion that few countries can match.
On July 21, Goldman Sachs Global Investment Research forecast that in 2009 and 2010 Peru would post the “strongest real GDP growth in the region”, although still a departure from its breakneck growth of 9.9% in 2008. With an average inflation rate of 2%, the lowest in Latin America, strong macroeconomic fundamentals, business-friendly government policies, and a recent decline in fiscal and external weaknesses, the Peruvian market offers diversification and attractive investment-grade opportunities for investors.