April 12, 2017 / 2:56 PM / 3 months ago

UPDATE 1-Peru cuts 2017 growth forecast to 3 pct due to flood impact -minister

2 Min Read

(Adds quotes from minister, background on flooding)

LIMA, April 12 (Reuters) - Peru's economy will grow around 3 percent in 2017, lower than the 3.8 percent previously expected, due to the impact of deadly floods, Economy Minister Alfredo Thorne said on Wednesday in a presentation to Congress.

The economy will grow 2 percent in the first half of the year before rebounding to grow 4 percent in the second half depending on the level of execution of planned reconstruction efforts in the areas affected by the floods, Thorne said.

"It's more than what some analysts have predicted and...we will still be among the highest-growth economies in Latin America," he said.

Over a hundred people have died in Peru from rain-related events since December, many in March after a sudden warming of Pacific waters unleashed torrential downpours. Floods and mudslides destroyed at least 6,000 miles of highways and damaged thousands of homes.

Last week, President Pedro Pablo Kuczynski said reconstruction efforts will cost $3 billion in the short term and up to $9 billion over five years.

Thorne had previously said public spending on reconstruction efforts would warrant a wider fiscal deficit than the currently-expected 2.5 percent of GDP. In his Wednesday presentation, he did not specify a new deficit target.

"What's important is that we have enough funds today to allow us to finance this increase in the deficit almost without debt," he said. (Reporting by Marco Aquino; Writing by Luc Cohen and Alistair Bell)

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