UPDATE 1-Peru's economy not rebounding as expected -central bank

viernes 13 de marzo de 2015 14:41 GYT

(Adds quotes from central bank economist, context)

LIMA, March 13 (Reuters) - Peru's economy is not recovering as quickly as expected because of a drop in public spending and that authorities must help get growth back on track, the central bank said on Friday.

Public investment fell 25 percent in January and February, according to Adrian Armas, the bank's chief economist.

"If public investment returned to the expected pace, we would see a strong recovery in economic activity," Armas said on a conference call with reporters.

Peru's economy grew 1 percent year-on-year in the fourth quarter amid a mining and fishing slump - the weakest reading since 2009 and well below the 5 percent pace that the central bank views as the country's potential growth rate.

The economy grew at a slower-than-expected 1.7 percent in January on the year, the president of the central bank told Reuters on Friday.

Armas emphasized that a recovery in the first quarter was underway, but he called it "slow."

"Why slow?" Armas asked. "Because unfortunately we're seeing a contraction in public investment ... that means the economy is recovering, but not at the level expected."

A 24 percent rise in public spending by the central government has helped offset the 50 percent drop in investments by local governments, which are in transition following elections last year.   Continuación...