Peru central bank sees economy growing 3.1% this year
Updates with details in paragraphs 4,5 and 7
By Marco Aquino
LIMA, Sept 20 (Reuters) -Peru's central bank expects that the Andean nation's economy will grow 3.1% this year and a further 3.0% in 2025, it said in a report on Friday, continuing a recovery following last year's recession when gross domestic product (GDP) contracted by 0.6%.
Central bank chief Julio Velarde said in a presentation that the 3.1% growth expectation was "probably biased to the upside."
The bank predicted that the fiscal deficit will gradually narrow from 3.3% of GDP this year to 2.0% next year and slightly increased its inflation forecast for this year to 2.3% from an earlier estimate of 2.2%.
Inflation forecasts remains firmly within the target range of the central bank, which last week cut its benchmark interest rate by 25 basis points to 5.25%.
The fiscal deficit forecast, Velarde said, includes government support for struggling state oil firm Petroperu PETROBC1.LM, which last week approved a further $1.75 billion in financing after its directors resigned.
The government, meanwhile, has predicted the economy will grow 3.2% this year and 3.1% in 2025.
In July, the economy grew nearly 4.5%, the fourth consecutive month of growth, continuing a recovery from adverse climate and anti-government protests that slowed the country's key mining industry last year.
The South American country, a major world supplier of copper, is currently battling extensive forest fires that have burned through crop lands and hit some archaeological zones.
Reporting by Marco Aquino; Writing by Sarah Morland; Editing by Brendan O'Boyle and Alistair Bell
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