UPDATE 1-Peru’s economy surges 11.92 pct in June on year

(Recasts, adds details)

LIMA, Aug 16 (BestGrowthStock) – Peru’s economy grew 11.92 percent
in June from the same month a year ago, official data showed on
Monday, as the Andean country is on track to be one of the
world’s fastest-growing economies this year.

Construction and manufacturing both surged by more than 20
percent in June, underscoring how domestic demand is driving
growth and has surpassed the traditional engine of minerals
exports.

Growth in June was faster than a market forecast of 10.9
percent and higher than May’s 9.19 percent expansion from the
same period a year earlier. The sizzling growth will likely
reinforce worries about potential overheating.

Economists said the central bank, which has already raised
its benchmark interest rate four times this year to 2.5
percent, would need to tighten further.

“Additional rate hikes are virtually inevitable given the
exuberance of domestic demand. That is, the very strong
cyclical recovery we are seeing no longer justifieds
maintaining a significantly accommodative monetary stance,”
said Alberto Ramos, economist at Goldman Sachs in New York.

The central bank’s last increase, by 50 basis points, was
larger than expected. Its next rate meeting is slated for the
first week of September.

The economy grew 8.17 percent in the first half of this
year from the same period of 2009, while data on growth from
May was not immediately available.
(Reporting by Teresa Cespedes; Editing by Diane Craft)

UPDATE 1-Peru’s economy surges 11.92 pct in June on year