Peru's growth forecasts appear overly optimistic

Significance The finance minister's hope that growth this year could reach 4% seems highly optimistic. The Central Bank has successfully reduced inflation to its target range, allowing interest rates to be lowered. Impacts The Peruvian economy is likely to remain susceptible to external shocks, making accurate prediction difficult. Pressure to raise taxation on formal businesses is likely to rise. The fiscal deficit is set to widen between now and the elections.