Latin American countries like Peru could help Europe grow its way out of recession by providing profitable investment opportunities, Peruvian Minister for Finance Luis Miguel Castilla told CNBC on Tuesday.
“I would tend to think European institutions are looking for sources of revenue, and I think investing in Latin America provides a way for Europe to grow out of its own crisis by relying more on countries such as Peru,” Castilla told CNBC Europe’s 'Investing Edge'.
He added that for European investors, Peru’s appeal lay in its combination of “profitability and security”.
“We are a country which has been growing at very fast rates over the last few decades. We have made progress in terms of poverty alleviation, and we have maintained a very stable background both macro-economically and in enabling a framework for investors,” he said.
Castilla forecast gross domestic productgrowth of 5.5-6 percent for Peru in 2012. In February, the Peruvian economy grew by 7.2 percent.
“I think sustainable growth that doesn’t introduce overheating would lie at around 6 percent, which is a little bit below our potential, which is about 6.5 percent,” he said.
Castilla said he did not think Argentina’s proposed nationalization of YPF , in which Spanish energy giant Repsol is the majority shareholder, threatens Peru’s reputation as an investment destination.
“I think investors have become more sophisticated in terms of not lumping all Latin American countries together. I think investors are able to discern countries that are pursuing market-friendly policies, and are respectful of contracts and of the rule of law,” he said.