Peru: Business confidence plummets amid electoral uncertainty
May 24, 2011
In April, the business confidence indicator (indice de Confianza Empresarial) published by the Central Bank plummeted to 46 points from 65 points in March. The monthly fall brought the index to its lowest level since April 2009, falling below the 50-point threshold that separates optimism from pessimism, suggesting that a majority of businesses turned pessimistic about future economic prospects over the next three months. According to the Bank, the monthly drop was the result of firms' escalating concerns about general elections to be held on 5 June, the result of which remains uncertain. In addition, the April reading showed that the construction, electricity as well as mining and hydrocarbons sectors deteriorated compared to the previous month.
Author: Ricardo Aceves, Senior Economist