UPDATE 2-Peru central bank trims 2017 growth outlook on political risks

viernes 16 de septiembre de 2016 16:06 GYT
 

(New throughout with comments from central bank president)

By Marco Aquino

LIMA, Sept 16 (Reuters) - Peru's central bank on Friday trimmed its economic growth outlook for 2017 to 4.5 percent from 4.6 in June, citing uncertainty over new government policies and the risk of Republican nominee Donald Trump winning the U.S. presidential election in November.

Central Bank President Julio Velarde said he was unsure of the economic impacts of reforms proposed by Peru's centrist President Pedro Pablo Kuczynski, who took office in July and has asked the opposition-controlled Congress to let him hike the corporate tax rate and raise infrastructure spending.

"Our forecast for 2017 has its limits because the measures that will be implemented aren't fully known," Velarde said during a presentation of the bank's quarterly inflation report. "We have to see what the impacts are in terms of business confidence."

Kuczynski's government has forecast a 4.8 percent growth rate for 2017, following the 4 percent pace that the central bank still expects for this year.

Velarde also cited the "smaller risk" to global economic growth that could impact Peru if Trump, who has promised to slap steep tariffs on Chinese and Mexican products, wins the U.S. election.

"There are fears with respect to a kind of trade war in the case of the United States, due to the threat of tariffs for China, Mexico and other countries," Velarde said.

But Velarde said the scenario was unlikely, in part because trade agreements and trade organizations could thwart the proposals. "A president is not a king," Velarde said.   Continuación...