Boston, MA -- (SBWIRE) -- 09/15/2012 -- BMI maintains its below consensus 4.8% real GDP forecast for Peru. The country's strong domestic demand story will continue in 2012, although we expect a drag from net exports. Significant external risks to the economy means we cannot rule out a more pronounced slowdown in growth in the latter stages of the year, on the back of weaker global demand for the country's minerals and moderating global commodity prices.
The expected slowdown in the Chinese economy will drag on the country's exports, putting some downside pressure on volumes, particularly at dry bulk handling ports. That said, we believe President Ollanta Humala is likely to implement pro-growth policies which will translate into stronger public consumption, which should in turn result in stronger demand for imports of containerised goods, boosting port volumes and supporting our positive outlook for the Peruvian port sector.
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Headline Industry Data
- We are projecting box traffic at Callao to grow 9.5% in 2012 to 1.1mn twenty-foot equivalent units (TEUs).
- We expect growth of 8.6% in total tonnage throughput at Callao to 20.1mn tonnes.
Key Industry Trends
Peru's Ports Could Move 2mn TEUs Per Year By 2014
Peru's ports could move up to 2mn TEUs by 2014, given the rapid expansion of the country's ports, according to Frank Boyle, president of Peru's National Port Authority (APN).
Port Of Callao Received 3,085 Vessels In 2011
The APN reported that the Port of Callao, the country's main container handling port, received 3,085 vessels during 2011.
Key Risks To Outlook
On the upside, increased private consumption should lead to greater demand for containerised goods. Despite concerns during the presidential campaign, we expect consumption to benefit from Humala's economic policies. Humala's new economic plan does not include increasing taxes on consumers; in fact, the president will seek to reduce VAT in the coming years, supporting consumer demand. The recent free-trade agreement (FTA) agreed between Peru and Japan and the associated abolition of import tariffs on goods travelling between the two countries should increase trade flows between the two.
Further upside is presented by the considerable investments being made in developing Peru's port infrastructure by international port operators such as DP World and APM Terminals.
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