Why Peru Attracts Investment From Major international stores?
more than three months into the year 2009, Latin America is coming increasingly to fall into recession. A few days ago, the IMF confirmed its projections indicating that the region can not skip this.
The deterioration in economic growth is already widespread and several countries of the region and have observed negative values in their growth rates and continue to correct downward growth projections. For example, last Monday gave account of the sharp contraction of the Chilean economy in the month of February (the Imacec threw an interannual decrease of 3.9% and 0.3% monthly) "Deterioration of the economy and problems of How will the box Argentina? "
In yesterday’s article on Argentina gave account of the contraction in industrial production for the second consecutive month in February and the fall in sales recognized by 62% of businesses surveyed by the Center for Trade and Services SMEs Strong contraction of the Chilean economy "
In Brazil the analysts consulted by the Central Bank projected a contraction of GDP for this year of around 0.19%. "Brazil expected contraction of GDP"
Among all this negative context, the economy of Peru is the best economic outlook notes that despite its economic growth projected for this year is markedly lower than achieved in 2008 (in 2008 GDP increased by 9.84% and for this year is expected to grow no more than 5%).
The Peruvian economy will be one of the few economies in the region that will see positive growth. But the government of Alan García is not satisfied with that pursue different aims and measures to boost growth. Peru needs to grow at high rates to achieve significant improvement in social indicators.
So while it is expected that the Reserve Bank to continue its cycle of rate cuts (now expected a 50 basis point cut in benchmark interest rate), the Peruvian government has just approved on Monday a new law to lower the cost of credit and credit boost, especially towards the construction sector, a key sector for the benefits it will produce the same to other sectors of the economy. With the lower cost of funding it will stimulate domestic demand that is likely to be stimulated by the strength of the observed economy.
To stimulate regional economies, Alan García resources available recently for $ 847 million for investment projects aimed at sustainable. This adds to the economic stimulus plan announced earlier this year in order to sustain a good rate of economic growth.
The continuity of economic growth in Peru will ensure continued improvement in social conditions, while slow, is unlikely to stop (but could be accelerated). And this improvement is observed, is occurring in Peru, trying to be exploited by foreign companies.
For example, 12 Brazilian companies have shown in recent days, interested in investing in the construction industry an estimated U.S. $ 350 million.
For other companies and internationally recognized, Peru provides an opportunity to offset the fall in sales in other countries in the region. For example, the Chilean Falabella (IPSA: FALABELLA) and Ripley (IPSA: RIPLEY), seek consolation by falling sales in Chile increased its investment in Peru.
These companies are pursuing a strategy of regional expansion in order to harness the potential benefits of economic growth in countries of the region in recent years. Although the crisis has put a brake on the growth dynamics, it is true that, in general, Latin American countries continue to grow at a healthy pace above the low point total. And with that growth will continue with the restructuring of the social situation which will result in a greater potential demand for various consumer goods.
As the crisis has impacted the sales of these companies, the new strategy is to redirect investment in markets that have seen better performance and that are likely to maintain its pace of expansion. And the Peruvian market in compliance with those requirements.
According to an article published on the site of the Peruvian News Agency: "The revenues of the retail business group in Peru linked to families Solari, Cuneo and Del Rio (including their formats Saga Falabella, and Tottus Sodimac ) increased 112% during the fourth quarter of 2008, a cumulative annual growth of 69.6%.
Also D & S (NYSE: DYS), which recently took control the U.S. Walmart (NYSE: WMT) is considering the possibility of investing in Peru. In fact D & S already has its plan of investing in Peru, but the recent takeover by Walmart part requires you to evaluate this alternative with the new partner.
Also Cencosud (IPSA: Cencosud) continues its strategy of investing in Peru. According to an officer recognized Ripley: "Sales are going well in Peru. Cencosud Obviously we spent there. "
I have no doubt that the big consumer companies are interested in Peru. But it is difficult to know if this country of just over 28 million with a poverty rate close to 36% of the population. Is there space in the Peruvian market to continue expanding?
According to a report from the Lima Chamber of Commerce: "The penetration of supermarkets, department stores and department stores are low and there is still room for further growth (...) because the main engine of growth remains domestic demand despite the crisis. "
Moreover, the continued improvement of the social situation, will in the medium term, an expansion of effective demand (which for now is only potential demand) to expand the market in which businesses operate.
The Peruvian economy continues its growth and develops. This creates great opportunities for investment not only in the consumer sector. The energy sector, the financial and housing are other sectors that are attractive and that will be analyzed later. Peru continues to grow, and nobody wants to miss the opportunity.
