Peru: Recent developments & outlook. Día del Perú Cámara de Comercio de Hamburgo September 11, 2007

Transcription

1 Peru: Recent developments & outlook Día del Perú Cámara de Comercio de Hamburgo September 11, 2007

2 Peru at a glance Key indicators Units Gross Domestic Product (2006) US$ 93 billion Population (2006, estimate) 27.5 million Per capita GDP (2006) US$ 3,375 Mean CPI inflation ( ) 2.0% Public debt as % of GDP (Dec. 2006) 32.7% Poverty as % of population (2006) 44.5% Net international reserves (Sep. 2007) US$ 24.2 billion Dollarization of loans (Dec. 2006, banking system) 54% Openness [(X+M)/GDP, 2006] 48 % Country GDP per capita US$ (2006) Main commodities exported World ranking (2006) Chile 9,227 Gold 5 Brazil 5,738 Copper 3 Argentina 5,349 Fishmeal 1 Peru 3,375 Zinc 3 Ecuador 3,031 Silver 1 Colombia Bolivia 2,801 1,081 Tin Coffee 3 9

3 Presidential approval Presidential approval during Toledo and Garcia s first months in office (in % of surveyed people) Alan García Alejandro Toledo Ago Sep Oct Nov Dic Ene Feb Mar Abr May Jun Ago Sep Source: Apoyo Opinión y Mercado

4 Peru s debt risk rating was recently upgraded Long-term foreign currency debt rating scale S & P Chile Mexico Brasil Colombia Venezuela Bolivia Ecuador S&P / Fitch Moody's Explanation AAA Aaa Highest quality (risk free) AA+ Aa1 AA Aa2 Superior quality AA- Aa3 A+ A1 A A2 Debt repayment capacity considered strong A- A3 BBB+ Baa1 BBB Baa2 Moderate repayment capacity BBB- Baa3 BB+ Ba1 BB Ba2 Some repayment capacity BB- Ba3 B+ B1 High repayment uncertainty. B B2 repayment uncertainty. Investment considered Investment considered risky B- B3 CCC+ Caa1 CCC Caa2 Highly vulnerable to default CCC- Caa3 CC C D Ca In default Investment grade Fitch: Peru s risk rating was upgraded to BB+ in August 06 S&P: Peru s risk rating was upgraded to BB+ in November 06 Moody s: Peru s risk rating was upgraded to Ba2 in y 07 Source: Standard&Poors, Moodys, Fitch

5 Peru priced as investment grade Peru & Latin America - Stripped spread sovereign bond index (JP Morgan Emerging Market Bond Index - basic points) 1,200 EMBI Latino 1,100 1, EMBI México EMBI Perú EMBI Perú (12/09/07): 171 pbs Ene-00 May-00 Sep-00 Ene-01 May-01 Sep-01 Ene-02 May-02 Sep-02 Ene-03 May-03 Sep-03 Ene-04 May-04 Sep-04 Ene-05 May-05 Sep-05 Ene-06 May-06 Sep-06 Ene-07 May-07 Sep-07 EMBI: Emerging Markets Bond Index The EMBI tracks total returns for traded external debt instruments in the emerging markets, in this case, Latin American instruments. The Latin Amercian EMBI is concentrated in instruments from the three major Latin American countries (Argentina, Brazil, and Mexico), reflecting the size and liquidity of these external debt markets. Source: Bloomberg

6 Inflation within the range set by the Central Bank 5.0 CPI inflation and core inflation, e (YoY % change) Inflation Forecast Max 3.0% Core inflation Min 1.0% -1.0 Ene 04 Mar May Sep Nov Ene-05 Mar May Sep Nov Ene-06 Mar May Sep Nov Ene-07 Mar May Sep Nov Source: BCRP, IPE

7 Sep-07 Mar-97 Jun-97 Oct-97 Feb-98 Jun-98 Oct-98 Feb-99 May-99 Sep-99 Jan-00 May-00 Sep-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Mar Nov -03 Mar Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Sep-06 Jan-07 May-07 Exchange rate: : Foreign exchange rate, (S/. per US$, montly average) Asian crisis 2001 Presidential elections Brazilian elections ( Lula effect) BCRP stopped its purchases, annual inflation (4.6%) well above the official target Russian crisis Brazilian Crisis Source: BCRP, IPE 2006 Presidential elections (Humala upraises in polls)

8 Export growth Peru - Exports, (US$ millions) Trade Balance, e (US$ billions) Non Traditional Exports Traditional Exports Forecasts e 08e Forecasts e 08e Source: BCRP, IPE

9 Fishing and mining exports Fishmeal exports, (US$ millions) Price and volume indexes of mining exports, (index 1994 II quarter =100) 2,500 2,000 1,500 1, , ,482 2,352 1,942 1,518 1,751 1,370 2, ,337 Índice Cantidad Price (right axis) Volume 99-I 00-I 01-I 02-I 03-I 04-I 05-I 06-I 07-I Índice Precios Source: BCRP Source: BCRP, IPE

10 Non-traditional exports 6,000 5,000 Agriculture Fishing Textile & apparel Others Non-traditonal exports, (in US$ millions) ATPDEA-USA 4,000 3,000 2,000 1, Source: BCRP

11 Trade between Peru and Germany is over US$ 1,300 millions Peru Main trading partners, year 2006 (in % of total exports) Peru - Germany Exports and Imports (US$ millions) Others 28.3% USA 23.3% Exports Imports 812 Spain 3.2% Italy 3.2% Brazil 3.5% Germany 3.5% Japan 5.2% Chile 6.1% Suiza 7.2% Canada 6.8% China 9.7% * Source: Sunat-Aduanas * January-july Source: Prompex

12 Foreign direct investment 4,000 3,500 3,000 2,500 2,000 1,500 1, Foreign direct investment, e (US$ millions) Direct investment without privatization Privatization Stock year 2006: US$ 15,4 billion Spain U.S. Mexico Chile Switzerland South Africa Canada England Brazil China Holanda Francia Alemania Others 2% 1% 1% Stock of FDI, % 5%6% 3% 2% 2% (a) By origin 8% 7% 8% 18% 33% 0% 5% 10% 15% 20% 25% 30% 35% Telecom 32% (b) By sector Transport Others 2% 5% Commerce 4% Energy 11% Finance 12% Source: BCRP, Proinversión Mining 19% Manufacturing 15%

13 Banking system Peru Banking system indicators (in US$ billions and as % of total loans, respectively) Direct credits by type (en miles de millones de S/.) Deposits & loans US$ millions 23,000 21,000 19,000 17,000 15,000 13,000 11,000 9,000 Loans Non performing loans (% of total loans - right axis) Deposits Jan-99 Jan-00 Jan-01 Jan-02 Jan 03 Jan 04 Jan 05 Jan 06 Jan NPL, as % of gross loans Mortgage Consum. Microenter. Commer Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec Source: SBS

14 Reserves and liquidity Net international reserves (NIR) composition (US$ millions) Liquidity: private pension and mutual funds (US$ millions) Public sector deposits at BCRP USD 10,361 24,000 20,000 Private pension fund Mutual funds Funds administered by ONP BCRP's net international position USD 3,042 USD 6,360 16,000 12,000 8,000 Deposits of financial intermediaries Source: BCRP US$ 24,221 (September ) USD 4,457 4,000 - Jan 03 Apr Oct Jan 04 Abr Oct Jan 06 Abr Oct Jan 06 Abr Oct Jan 07 Abr

15 GDP growth GDP growth (% change) Sectors Peso Agriculture and livestock Fishing Mining and fuel Manufacturing Based on raw materials Non-primary Construction Commerce Other services Gross Value Added (GVA) Primary sectors (sectors characterized by their low contribution to overall value-added, associated to traditional production & commodity exports) Non-primary sectors (these sectors have a weight of 83% in the growth of the global real GDP, and are associated with domestic demand & non-commodity exports) Taxes on products and import duties GDP Primary sectors GVA Non-primary sectors GVA Growth is expected to continue be leaded by nonprimary sectors Source: BCRP, IPE

16 Manufacturing Rate of capital use of the non primary manufacturing sector, (as % of total capacity) Growth Contribution to Manufacturing of the External and Internal Markets (as % of total growth) I Sem 07 Source: BCRP I I I I Internal Market External Market

17 Construction Unsatisfied housing demand in Lima, by price (in thousand of houses and US$ respectively) Construction GDP, (YoY % change, moving average 12m) and more Housing Prices (US$) Until Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-04 Jan-06 Jan-07 Source: CAPECO Source: BCRP

18 Trickle down positively impact on households income in Lima Distribution of households in Lima by income, 2002 & 2006 (% of surveyed households) 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% % 5.3% 17% 28% 57 18% 34% Category Mean household income (US$ per month) A US$ 3, Estimated # of households (thousands) B US$ C US$ % 30.0% 20.0% 52 31% 43 28% D US$ % 0.0% 21.3% 15.5% E US$ Source: Apoyo Opinión y Mercado

19 and in the main cities Mean household income by city, (constant S/. of june 2007) Arequipa Trujillo Piura Chiclayo Cusco Huancayo Iquitos Lima Source: Apoyo Opinión y Mercado

20 Private investment Quarterly growth of private investment, domestic demand & real GDP (moving average last 4-quarters of YoY % change) Private investment Domestic demand How do you consider that the economy will perform in the following 3 months?, Central Bank of Peru's survey to business (in %) Better GDP I-02 II IV I-03 II IV I-04 II IV I-05 II IV I-06 II IV I-07 II Worse II-02 IV I-03 II IV I-04 II IV I-05 II IV I-06 II IV I-07 II Source: BCRP

21 Public debt and economic result Domestic and external public debt, e (as % of GDP) Economic Result of the SPNF (as % of GDP) External Serie4 Forecasts Domestic The fiscal superavit is expected to reach or exceed 1.5% of GDP e 08e e Source: BCRP, IPE

22 Public debt Domestic and external public debt, e (as % of GDP) Forecasts 27.1 Domestic 9.1 External 18 08e Source: BCRP

23 Low levels of infrastructure investment 5.0% 4.5% Peru Infrastructure investment, (as % of GDP) 4.0% Private 3.5% 3.0% 2.5% 2.0% Public 1.5% 1.0% 0.5% 0.0% Source: IPE

24 Infrastructure gap Infrastructure investment gap (US$ million) Sector Lima Metr. Regions Total Transport 680 7,004 7,684 Roads 58 6,771 6,829 Ports Airports Railroads Water & sewerage 2,369 2,250 4,619 Electricity 207 5,316 5,523 Natural gas Telecom 2,745 1,888 4,633 TOTAL 6,102 16,778 22,879 Distribution % 26.7% 73.3% Source: IPE

25 Mining projects Project Mineral Location Investment (US$ millions) Toromocho Copper - Zinc - Lead Junín 1,500 Las Bambas Copper Apurimac 1,000 Minas Conga Gold - Copper Cajamarca 900 Cerro Verde Copper Apurimac 850 Quellaveco Copper Moquegua 830 La Granja Copper - Gold Cajamarca 700 Southern Los Chancas Gold Apurimac 600 Proyecto Antapaccay Cooper Cuzco 600 Southern - Ilo Modernization Copper Moquegua 600 Michiquillay Copper - Gold Piura 600 Sinchao Gold Cajamarca 400 Bayovar Phosphates Piura 350 Opaban Iron Apurimac 350 San Gregorio Zinc - Lead Pasco 300 Cerro Corona Copper - Zinc - Lead Cajamarca 270 Rio Blanco Copper Piura 200 Berenguela Copper - Silver Piura 150 Magistral Copper Ancash 130 Marcapunta Copper - Gold Pasco 100 Other projects (5 projects) TOTAL MINING 10,710

26 Other projects Project / Company Sector US$ mill Petrobras Energía Perú Fuel - Contracts Amerada Hess Peru Fuel - Contracts Others Fuel - Contracts Fuel 709 Etevensa Energy - Investment Enersur Energy - Investment BPZ Energy - Investment Globeleq Energy - Investment Energy 450 Red Vial 6 Infrastructure - Investment Olmos Infrastructure - Investment IIRSA Norte Infrastructure - Investment Interoceánica Sur Infrastructure - Investment Muelle Sur - DP World Callao S.A Infrastructure - Investment Infrastructure 1,956 Camisea II Gas 2,150 Gas 2,150 Total 5,265

27 Poverty level could reach 38% by 2010 Poverty Level, e (as % of total population) Poverty Level, (as % of total population) % Growth for National Costa Sierra Selva Public service improvement 30.0 Goverment s goal for e e Source: MEF, INEI, IPE

28 Summary e 2008e 2009e R E A L S E C T O R GDP (US$ bn) 78,432 93, , , ,470 Real GDP growth (%) Private investment (% change) High growth rates P R I C E S CPI (% change YoY) Exchange rate (average - NS per US$) Annual depreciation (% change of ER) P U B L I C A C C O U N T S Tax revenues (% of GDP) Overall result (% of GDP) E X T E R N A L S E C T O R Exports of goods 17,336 23,800 26,201 26,842 27,161 Imports of goods 12,076 14,866 17,988 20,188 22,159 Trade Balance (US$ mill) 5,260 8,934 8,213 6,654 5,002 Current Account (% of GDP) Internac. Net Reserves (US$ bnl) Moderate fiscal deficits Positive trade balance

29 Moreover: Padlocks introduced in to the Constitution that we approved in 1993 in order to assure a market economy. Prohibited all kind of control of prices. (Assuring freedom of prices). Monopolies prohibited. (Assuring free competition) Prohibited the control of the exchange rate. (Assuring the free exchange of foreign currency ) Prohibited restrictions on repatriate utilities. (Assuring the free repatriation of utilities)

30 Prohibited tributary differences for national and foreign investments. (Assuring an equal tributary treatment for all foreign investments) Prohibited the State from modifying contractual terms. (Respecting all contracts between individuals and the State and individuals) The Legislation allows the subscription of stability tributary contracts. Legislation allows the anticipated recovery of sales tax for investments greater than XXX dollars in any sector.

31 Possible sectors of investment: Construction Mining Forestry Aquiculture Petro-chemicals Energy Manufacturing Agriculture Fishing (direct human consumption) Agribusiness (bio energy, ethanol) Possible public-private projects to accede to the PPP Fund (Germany)

32 Peru: Recent developments & outlook Peru: Recent developments & outlook Día del Perú Cámara de Día Comercio del Perú de Hamburgo Cámara September de Comercio XX, de 2007 Hamburgo September, 2007