Peru Hope

Booming Economy in Peru

We had not been back to Peru for four years and the difference was amazing. There are shopping malls, and super markets. Real Estate prices were soaring with banks lending at modest rates. Consumer credit is a little more sticky. Durable goods orders must be way up, because every where we went there were washers, and dryers. Cars also seem to be in better condition, newer than I remember.

Many of the public works projects that I admired ten years ago are being finished. Telephonica is constructing cell phone towers where ever you look. Many of the international mining projects seem to include a local partnership. There are complaints from some that too much of the development is financed by money from Chile, but the important thing is the taxes are paid in Peru.

It’s hard to make the leap when people see Lima, or any larger city in Peru, that there is still desperate poverty in the jungle, or the mountains. More investment is asking for more returns. Even though the government gets more tax dollars they have an entire country to build. We here in the United States, or the people in Europe, just expect the roads to go somewhere. We expect the freeways will be finished eventually. In Peru, you can look at a project that has been sitting untouched for decades.

There is so much to do, but it looks like today the doors of prosperity may be opening. My hope is that this new found credit will be used responsibly and the housing bubble that is being created can be sustainable, or deflate ever so slowly. In my opinion the global economic crisis happened in the rest of the world as an example of how to manage growth here, in Peru.