IKN

Take physic, pomp

Peru: A billion here, a billion there……….

…..and pretty soon we’re talking about serious money.

Remember this chart from a few days ago that shows Peru’s rapidly shrinking GDP forecasts for 2009?


Well, add another notch down to that. On top of the $4Bn or so that lower metals prices are going to lop off exports, on top of the wholesale job layoffs in its industry, on top of the sharp downturn in foreign remittances at make up 2.5% of Peru’s GDP, on top of the indefinitely deferred capex projects we’ll be hearing about soon…on top of all that, Peru’s tourist industry (as predicted) is crumbling. This report in El Comercio today has the head honcho of the Society of Hotels of Peru (SHP) as saying bookings and reservations are down 30% (yep, thirty) from 2008 levels. To get that into context, tourism in Peru was an U$8.7Bn business last year and accounted for 7.5% of country GDP.

Also, it’s worth remembering that unlike mining, tourism is a very labour-intensive industry (waiters, tour guides, hotel receptionists, drivers, park keepers etc etc) and this kind of downturn will be felt keenly in the pockets of José Publico (in fact, here’s a little link that explains tourism provides one in every 14.6 jobs in Peru right now).

But all this doesn’t count, because Twobreakfasts said Peru is going to grow 6.5% next year and thus it shall come to pass. Or was that 6%? Or maybe it was 5%? That’s what comes of pinning your growth prospects on a birdshit museum, y’see.

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