September 26, 2012 / 9:42 PM / 5 years ago

Peru public investments to grow less than planned -minister

NEW YORK, Sept 26 (Reuters) - Peru expects a 30 percent increase in public investments this year but has faced delays caused by bad weather that has slowed projects, Finance Minister Luis Miguel Castilla said on Wednesday.

Critics have also blamed weak local governments for the holdups.

“Public investment will grow some 30 percent this year. There were delays because of weather issues. We expect to gain lost ground during the last quarter of the year,” Castilla told Reuters at an investment conference in New York.

Peru has at times sounded more optimistic. President Ollanta Humala said in July that outlays forecasted in the government’s pipeline of planned projects had risen 130 percent in the first half of this year.

But implementation has been hobbled at times by red tape and reliance on local bureaucracies to implement projects as the government tries to spend a public sector surplus that reached 7 percent of gross domestic product in the first half this year.

Castilla said he expects public investment to increase next year and compensate for slower growth in the private sector.

“This year public investment is at 5.2 percent of Peru’s gross domestic product. Next year it will rise to 5.6 percent,” Castilla said, adding that the government is betting on public investments and public-private projects.

Peru, South America’s fastest-growing economy, is on track to expand 6 percent this year and next year, and to speed up to 6.3 percent in 2014, Central Bank President Julio Velarde said earlier on Wednesday.

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