A BLEAK PANORAMA FOR PERUVIAN CONSUMERS.
The Toledo regime of Peru has instilled little confidence in the international economic community and it appears now that recovery from the nation's 3-year recession will be a slow process. As a result, public sector consumption is likely to expand more rapidly than that of the private sector through 2002.
Strongest gains in public sector spending will be in the education and health sectors. This should lead to firm demand for products and services linked to construction and operation of schools and hospitals through 2002 and 2003. Increased social spending will be offset by a corresponding decrease in military expenditures. Many purchases of military equipment and supplies scheduled for 2002 will be put on hold indefinitely in·def·i·nite
Not definite, especially:
a. Unclear; vague.
b. Lacking precise limits: an indefinite leave of absence.
Toledo was elected based on his promise of alleviating Peru's endemic endemic /en·dem·ic/ (en-dem´ik) present or usually prevalent in a population at all times.
1. poverty (54 percent of Peru's 26 million people live on US$1.25 a day or less). Toledo and his closest advisors expressed confidence that increased government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. on social programs will put a dent in poverty, but it is unlikely that this strategy will pull Peru out of recession.
Peru's fragile economy is struggling to emerge from nearly 40 months of recession. The decline in economic activity has crippled crip·ple
1. A person or animal that is partially disabled or unable to use a limb or limbs: cannot race a horse that is a cripple.
2. A damaged or defective object or device.
tr.v. internal demand over the past two years and left many local companies with a heavy burden of debt. Toledo's economic policies are unlikely to revive the economy during 2002, and as a result, consumer power and household consumption will remain stagnant stagnant /stag·nant/ (stag´nant)
1. motionless; not flowing or moving.
2. inactive; not developing or progressing. , if not lose ground.
Decreasing confidence will have a negative impact on both household and industrial expenditures. Weak capital investment will undermine Peru's industrial competitiveness in the medium to long term.
The gross domestic product of Peru rose 2.3 percent year-on-year in September 2001, but the economy shrank shrank
A past tense of shrink.
a past tense of shrink
shrank shrink 0.8 percent overall during the first nine months of the year. The International Monetary Fund recently projected that Peru's economy would grow 4.0 percent during 2002. However, Toledo's economic measures make it unlikely that GDP GDP (guanosine diphosphate): see guanine. will expand more than 3 percent, which is too low to improve the economic plight of the average Peruvian.