Peru - Economic situation and medium-term prospects

RESTRICTED Report No. WH-212a This report is for official use only by the Bank Group and specifically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION PERU: ECONOMIC SITUATION AND MEDIUM-TERM PROSPECTS January 31, 1972 South America Department  CURRENCY EQUIVALENTS Currency Unit - Sol (S/) US$1 = S/38.70 S/1 = US$0.026 S/1,000,000 US$25,840 US$1s000,000 2 S/38,700,000 Above rate applies to some ,5 percent of total foreign exchange tran.actions (largely trade) and is used throughoat this report. There is also a draft marke-. rate of US$1 S/43.38 which covers some 15 percent of foreign exchange transactions.  TABLE OF CONTENTS Page MAP BASIC DATA INTRODUCTION SUMMARY AND CONCLUSIONS i I. RECENT DEVELOPMENTS 1 A. Economic Growth 1 B. Investment and Savings 2 C. Credit and Prices 5 D. Balance of Payments 7 II. NATIONAL DEVELOPMENT PLAN 10 A. Introduction 10 B. Overall Objectives 11 C. Economic Sectors and Public Investment 15 D. Agriculture 15 E. Industry 18 F. Fisheries 21 G. Mining and Hydrocarbons 23 III. PUBLIC INVESTMENT AND ITS FINANCING 25 A. Technical Constraints 25 B. Financial Constraints 27 Revenue Prospects 27 Current Expenditures 29 Public Savings 30 Financing of Public Investment 30 IV. BALANCE-OF-PAYMENT PROSPECTS, 1972-74 33 A. Exports 33 B. Imports 34 C. Capital Requirements 35 D. External Debt 38 STATISTICAL APPENDIX This report is based on the findings of an economic mission to Peru in October 1971, composed of Messrs. Michel J. Devaux (Chief of Mission), Roberto Echeverria (General Economist), Surinder K. Malik (General Economisi, Arturo Guzmnan (General Economist) and Mrs. Carmen Martinez (External Debt Specialist). Mr. Ben E. Lehbert (Senior Loan Officer) contributed estimates of domestic and external financing requirements of major projects for 1972-74.   . ) ~~E C U A D O R ./ C O L O M B I A/ ' ~ E UA O '..- COLOMBI---- /A-i TUM3ES - X -/ ~ ~~~~~~ , ',~ ! T t *5) IOUITOS/>, ~~~/ / ' O5 )O I* *j*~. Tino 10,0~~~~~~~~~~~~~~~~I- Po,ta Salmon ~~~~~~~~~~~~~~~~~'ONON- ~ -l Poisulano t ! 'HR PiF R A/ , \ <_uo __ kuri~~~~~~~~~~~~u,maguosC MOYOBAMBA .1 HAC HAPOYAS i -C LAYO > oJanji. Pacosmoyo.9 ti ' \>, ,. \ O P p : : ) t o t -I e A B~~~~~~~~~~~~~~~~~~~~~ R A Z I L TRUJILLt sb " XP-reoy TwocheX Pucollpo -K g o Po ncho 8 > / a / A gnoytio > Ch imboni, \ a \gTingo Morio wE )\M _/ ~~~~~~~~~~ ~~Vonohuonco Ooxpon,przo' 7z Poromango CERRO de \Atoloyo Huoch%^ / it ~~~~~Tor,/ In1 ; '^