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Peruvian finance ministry cuts 2019 GDP forecast to 3% from 4.2%

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Peruvian finance ministry cuts 2019 GDP forecast to 3% from 4.2%

Peru's ministry of finance has lowered its GDP projection for 2019 to 3.0% from a previous forecast of 4.2%.

In an Aug. 23 report on the South American country's macroeconomic situation, the ministry pointed to an adverse international scenario amid the ongoing U.S.-China trade tensions and transitory supply shocks in the fisheries, mining and primary manufacturing sectors.

However, the ministry sees economic activity picking up in the coming months, as several major infrastructure and mining projects will be undertaken in the country. Peru's solid macroeconomic fundamentals should help sustain average annual growth of 4.4% throughout the next four years, according to the report.

If these expectations are met, Peru would continue to lead growth in the region, despite an adverse external scenario.

"This acceleration will be driven, mainly, by internal demand reflected in the strengthening of private and public investment; in addition to economic policy measures aimed at improving the country's productivity and competitiveness," Finance Minister Carlos Oliva said.

The GDP forecast for this year is lower than Peruvian President Martin Vizcarra's July estimate of 3.5% for 2019, a report by El Comercio noted.

Faced with volatility in international trade and political uncertainty in major Latin American markets, the region's GDP projections for this year have been steadily falling in recent months.