May 4, 2016 / 8:22 PM / in 2 years

Peru's Fujimori would lift annual growth rate to 5-6 percent: adviser

LIMA (Reuters) - Economic growth in global metals exporter Peru will quicken to 5 to 6 percent a year from 3.3 percent in 2015 if Keiko Fujimori wins the June 5 presidential election, her new economic adviser said on Wednesday.

Peruvian presidential candidate Keiko Fujimori of Fuerza Popular (Popular Force) party visits a recycling plant in San Juan de Lurigancho in Lima, Peru, May 4, 2016. REUTERS/Mariana Bazo

Elmer Cuba, an economist with local consulting firm Macroconsult, who previously worked at the central bank, said he decided to join Fujimori’s campaign after “long conversations” with the center-right candidate in recent weeks.

“We’re going to accelerate economic growth with strongly countercyclical, well-thought-out and timely economic policies to bring the economy to a growth rate of between 5 and 6 percent” a year during a five-year presidential term, Cuba said in broadcast comments at an event with Fujimori.

Fujimori is a former congresswoman and the eldest daughter of imprisoned former President Alberto Fujimori. Opinion polls show she is neck and neck with her centrist run-off rival Pedro Pablo Kuczynski, a former World Bank economist.

Cuba said a Fujimori government would need to be “imaginative” about how to finance her promised surge in infrastructure spending at the end of a decade-long mining boom.

Fujimori has proposed jump-starting economic growth by building roads, irrigation canals and other public works she would pay for by tapping the Finance Ministry’s nearly $7 billion rainy-day fund and possibly issuing new bonds.

“Peru will not lose the fiscal prudence that it has taken us so long to win,” Cuba said.

Economic growth in Peru slowed sharply in 2014 as prices for the country’s mineral exports tumbled and investments slipped. But the government expects growth to rise to 3.8 percent this year on rising copper production from new mining projects, such as Freeport McMoRan Inc’s expansion of its Cerro Verde deposit and MMG Ltd’s Las Bambas project.

But Cuba called Peru’s economic recovery a “mirage,” saying it was being driven mainly by just a couple big mining projects.

“If we remove them from the scene, growth is still slowing” to an annualized rate of between 2 and 2.5 percent, Cuba said.

Cuba was previously a leader in the political party of centrist technocrat Julio Guzman, Fujimori’s main rival before the country’s electoral board barred him from the first-round vote on a technicality.

Markets rose on April 11 after Fujimori and Kuczynski, both free-market champions, defeated a leftist rival to move on to a run-off.

President Ollanta Humala cannot govern past July 28 because of term limits.

Reporting by Mitra Taj; Editing by Peter Cooney

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