Updated 05:50 AM EST, Wed, Jan 27, 2021

Peru Economy on the Rise: The Best Way to Invest in the Country

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Peru will continue to grow economically this year. The rising copper production and post-electoral investment rebound will "bolster the economic recovery," so says Finance Minister Alonso Segura. The sixth-largest economy in South America is set to grow as much as 4 percent this year, and another 5 percent or more in 2017, as the gross domestic product rose to a probable 2.9 to 3 percent last year.

Bloomberg Business reported that Segura outlined the growth in which the economy is accelerating, beginning with the MMG LTD making its first shipment from the Las Bambas copper mine.

Andina mentioned that right now, the public investment of Peru already amounts to about $54.97 million as of January 21st, and was executed by the local, regional, and national government alike. The country's central bank also "raised the benchmark lending rate for the second consecutive month in a row," saying that the stronger economic growth near the end of 2015 also put Peru "above-target inflation," which plagued many of its neighboring countries.  

Already, Spain and China showed interest in investing toward the South American nation. Norwegian seafood company Austevoll (Austral Group) is also expanding its investment. Undercurrent News reported that the company currently announced an additional vessel for mackerel and jack mackerel fishing to its fleet in Peru.

Spanish entrepreneurs are interested in the Toro Macho railway project that will connect the Andean cities of Huancayo and Huancavelica. China, on the other hand, has invested in the mines, and among its more ambitious projects is the Toromocho copper mine in Morococha.

So why are countries investing in the country and why are they doing so? According to Investment Frontier, the average value traded in Peru per day for companies that have a market cap of over $5mm is relatively low at $37mm. This provides sufficient liquidity for investors -- foreign institutional and retail alike.

While mines and railways are among the biggest money sources in the country, other popular investments include aggregation, publishing, food and beverages, breweries, and multi-line insurance, as per Investment Frontier. 

Still, despite the positive economy, MSCI thinks that Peru may still be demoted from emerging market to frontier market status after its May review, as the global slump also affected its commodity and equity markets, and are not helping the country increase its liquidity. 

However, Segura remains confident that Peru will keep its status, considering the measures taken by the government as well as the Peruvian stock exchange to "boost up trading volumes."

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