UPDATE 1-Peru cenbank trims view of potential growth rate to 4-4.5 pct

viernes 11 de septiembre de 2015 14:34 GYT
 

(Adds quote from central bank economist, context on growth and rate hike)

LIMA, Sept 11 (Reuters) - Peru's central bank on Friday further trimmed its view of the economy's potential growth rate, lowering it to between 4 and 4.5 percent in part because of a drop in investments, the bank's chief economist Adrian Armas said.

The central bank last estimated the pace at which Peru's economy can expand without stoking inflation at 5 percent.

The potential growth rate, which the central bank considers when evaluating monetary policy, was 6 percent a couple years ago, said Armas.

"Today with current conditions of productivity and investment, we're estimating that the potential growth rate is between 4 and 4.5 percent," said Armas.

The central bank expects the sluggish economy to perk up and expand at about that pace next year.

"Going forward it (the potential growth rate) is going to depend on the measures that the Peruvian state takes to improve growth," said Armas.

Despite initial signs Peru's mining -fueled economy may be recovering from last year's sharp slowdown, the annual growth rate came in at just 1.92 percent in June.

Late on Thursday the central bank surprised the market by cutting the benchmark interest rate by 25 basis points despite below-potential growth.

Armas described the move as a "preventitive" step aimed at controlling above-target inflation pressured by the depreciating currency. (Reporting By Mitra Taj; Editing by Chris Reese, Bernard Orr)