Peru Economy: Entrepreneurs Give Grim Predictions for Country's Business Sector this Year

A recent survey by the Chamber of Commerce of Lima (CCL) entrepreneurs doesn't regard 2015 as a positive year for Peru's business industry.

Peru this Week reported from El Comercio that in 2014, 23 percent of entrepreneurs granted a positive outlook for business, while only 9 percent said the economy is doing well this year.

El Comercio explained that "the economic slowdown, an imminent El Niño climate phenomenon, the perception of inaction in the political economy by the part of the government" have greatly affected the confidence of entrepreneurs. CCF's survey found that 54 percent of entrepreneurs don't expect businesses to have great success this year.

In spite of this low optimism, entrepreneurs are still eyeing a small number of promising businesses, Peru this Week listed. Alicorp, Inca Kola, and Gloria are companies that have maintained their positions as three of the industry's most successful brands.

"Alicorp has been going strong this year, expanding product lines for several of its brands and generating more sales," said Octavio Zumarán, commercial manager of the CCL, as reported by the news outlet from El Comercio.

The Fundación Getulio Vargas (FGV) said this month that Peru has the best position in the region for conducting business, but the South American country is in the midst of its worst international slowdown in the last seven years, a separate report from Peru this Week stated. According to the Economic Climate Index report published through the FGV, Peru's business situation plummeted from 119 points in July down to 97 in October, and is in its least favorable position for business. However, the nation is still leading in the entire region.

Within Latin America, Peru tops Paraguay (95 points), Mexico (87), Colombia (86), Bolivia (80), Argentina (72), Chile (72), and Uruguay (66), the news outlet listed.

Copper Surge Boosts Economic Growth in Third Quarter

The rise of Peru's copper output from new mines has compensated for weak domestic demand and has been keeping economic growth stable in the fourth quarter, said Hugo Perea, chief economist at BBVA Banco Continental, Bloomberg reported.

The price of copper, Peru's biggest export, is extending a "four-year slide while spending bottlenecks crimp public investment," Bloomberg wrote. Perea said in a phone interview with the news outlet that the recovery is being felt, and that "domestic demand is still growing slowly."

According to the news outlet, mining activity expanded to 17 percent and retail has risen to 4.1 percent in the third quarter. The central bank, currently in consideration of a second rate increase in four months at its December meeting, is hopeful that growth will speed up in the second half of 2015 and 2016.