December 7, 2016 / 3:28 AM / 2 years ago

Peru to post first trade surplus in 2016 after 2 yrs of deficits-cenbank

LIMA, Dec 6 (Reuters) - Peru’s central bank expects the Andean country to post a $617 million trade surplus in 2016 following two years of deficits and a $1.77 billion trade surplus in 2017, the bank’s general manager said Tuesday.

Peru’s trade balance turned negative in 2014 in the wake of the global commodities bust but has steadily improved this year on the back of surging copper exports from new and expanded mines. Peru is a leading producer of copper, zinc and gold.

In a September report, the central bank had forecast a $442 million trade deficit for 2016 and a $367 million surplus for 2017. The central bank is scheduled to release a new quarterly report with updated forecasts next week.

Renzo Rossini, who is not part of the bank’s policy-making board but has been its manager since 2003, also said that inflation should cool to about 3.1 percent by the end of the year before coming in at between 2 percent and 2.5 percent in 2017.

The central bank last forecast the 2017 inflation rate at between 2 percent and 2.2 percent. Inflation eased to 3.35 percent in November - still above the upper limit of the central bank’s 1 percent to 3 percent target range.

Slightly high inflation has been driven by “temporary factors and it wouldn’t be prudent to squeeze the economy” over them, Rossini told journalists on the sidelines of an event, signalling that the central bank was not inclined to hike the benchmark interest rate.

Reporting By Teresa Cespedes

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