Home » Peru: Staff Report for the 2013 Article IV Consultation by International Monetary Fund West Dept
Peru: Staff Report for the 2013 Article IV Consultation International Monetary Fund West Dept

Peru: Staff Report for the 2013 Article IV Consultation

International Monetary Fund West Dept

Published January 29th 2014
ISBN : 9781484395103
ebook
89 pages
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 About the Book 

KEY ISSUES Context: The current account is worsening, coinciding with peak debt service, limited market access, and low reserves. Although the authorities have taken ad hoc measures to curb acute exchange rate pressures during the summer, a strongerMoreKEY ISSUES Context: The current account is worsening, coinciding with peak debt service, limited market access, and low reserves. Although the authorities have taken ad hoc measures to curb acute exchange rate pressures during the summer, a stronger policy response is urgently needed to reduce external imbalances and mitigate risks. Challenges: Facilitating external adjustment through a consistent set of policies is the key short-term priority. The medium-term challenge remains to increase efficiency and competitiveness through deep structural reform, with strong measures taken up front to enhance credibility. Policy recommendations: No further wage increases in 2013-14, to curb demand and regain competitiveness- Sharply reduce directed lending, to limit credit growth and contingent liabilities, and reduce external imbalances- Substantially scale back foreign exchange market intervention and tighten monetary policy to facilitate exchange rate and balance of payments adjustment- Adopt comprehensive and ambitious structural reforms to raise sustainable growth