December 20, 2019 / 5:53 PM / a month ago

UPDATE 1-Peru's Central Bank gloomier on 2019 growth projections

(Adds comments by central bank chief)

By Maria Cervantes

SANTIAGO, Dec 20 (Reuters) - Peru’s Central Bank on Friday said it had reduced its economic growth projection for 2019 to 2.3% from 2.7% previously amid a slowdown in the global economy and lower public investment in the Andean nation.

The bank maintained its estimate for 3.8% GDP growth by 2020 in its latest macroeconomic projections report.

It saw a lower fiscal deficit for 2019 of 1.7% of GDP compared to a previous 2.0% projection, and 1.6% by 2020.

It projected inflation at 1.9% for 2019, down from 2.0% previously predicted, and maintained its projection of 2.0% inflation for 2020.

Peru’s Central Bank chief Julio Velarde said as well as external factors and slowed domestic spending, the bank had revised its growth projections downwards because of the poor performance of the key mining sector.

“That is the factor driving lower growth this year, and will also boost the recovery the next,” he said.

“This year, compared to 2018, we were hit by lower export volume and with that lower growth.”

Mining - principally of zinc and copper - accounts for about 15 percent of Peru’s gross domestic product, and minerals make up some 60 percent of export earning. (Reporting by Maria Cervantes, writing by Marco Aquino and Aislinn Laing Editing by Chizu Nomiyama)

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