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Peru second best for business in Latin America

Peru second best for business in Latin America

Posted by Juan Gavasa on March 18, 2014

In case you haven’t been following Peru’s recent economic ascent to the second best for businessin Latin America; let’s begin with a brief review of the facts.

The following information comes from state news agency, Andina and can be summarized into five points on Peru’s recent economic successes.

[1] Peru has established itself as a stable environment for investors, possessing the necessary political prowess to manage social conflict with ease and consistency.

[2] According to Fitch Ratings’ Latin America Sovereign Group rating agency, Peru is growing faster and managing inflation better than other Latin American countries with the same credit score (BBB+), making it possibly the most dynamic economy in Latin America.

[3] Economic forecasting indicates that Peru will be the second fastest growing economy in the world for 2014 and 2015, second only to China. In doing so, The Latin Focus Concensus Forecast predicts Peru will grow faster than both the Southern Common Market (Mercosur) and the Andean Community (CAN).

[4] Peru’s National Institute for Statistics and Information released data indicating that GDP grew 5.02% in 2013, and the fastest growing industry was construction, which grew at 8.56%.

[5] Finally, the Oxford Business Group praised Peru’s legal framework and consistent GDP growth as being essential for attracting more foreign direct investment. The group also mentioned increasing economic diversification as being an especially strong quality of the Peruvian economy.

These and other recent developments have lead to Peru being named second best for business in Latin America, by a 2013 Bloomberg survey (Chile came in first). In the survey Peru jumped 13 places, from 50th to 37th, in one year. So with all the good news, what work is still left to be done? And what could continued economic progress mean for entrepreneurs in Peru?

The 2013 World Economic Forum’s Global Competitiveness Report offers several room-for-improvement insights. First, the report suggests that Peru must continue to strengthen its public institutions and government efficiency, fight corruption, and improve infrastructure. Second, the government must increase investment in education and research and development to stimulate innovation, and close the substantial skills gap in the labor market. Third, aforementioned adjustments must guide economic diversification and progressive development into more ‘knowledge-rich activities.’ Sustaining economic progress and creating opportunities for more Peruvians is certainly no simple task. But Peru is on the right track, and continued economic development is very possible, especially if innovation becomes a priority.

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