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AmericasNovember 3 2014

Peru bounces back from 'tapering tantrum'

Peru's stellar economic performance over the past decade hit a bump in 2013 as a result of the US quantitative easing programme. However, the country's central bank governor sees this as a temporary setback, and reports that the Peruvian economy is back on the track towards long-term growth.
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Peru bounces back from 'tapering tantrum'

After a decade of hectic growth, the Peruvian economy was hit hard by 2013’s “tapering tantrum” – as Julio Verlarde, the country's central bank governor, describes the impact of the US Federal Reserve tapering its quantitative easing programme – but it is now back on course and predicted to grow by 6% in 2015.

This year growth is likely to be about 4%, says Mr Verlarde, who argues that Peru's past decade has been about much more than a typical Latin American commodities boom. While Peru's economy was certainly boosted by high gold and copper prices over this period – and has been impacted by recent price reversals – it has an investment rate of 28% of gross domestic product (GDP), which is translating into both expanded commodity production but also increased exports in other sectors such as agriculture.

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