March 1, 2014
Chile and especially Peru remain among the select few emerging markets which still excite international investors after the emerging-markets rout. Those seeking to defend the prospects for developing markets often point to Peru in particular, with its healthy fiscal balance, and still strong levels of GDP growth.
Both countries, however, are dependent to a large extent on mining, and by extension Chinese growth. In recent years, copper prices have benefited from China’s export-focused investment drive, but a more consumption-orientated growth model in China could mean less demand for metals like copper in Chile and Peru.
In Chile, as Michelle Bachelet starts her second presidential term,
Chile and Peru both face the challenge of less voracious Chinese demand for copper – in addition to political and economic hurdles specific to their individual situations.