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flag Peru Peru: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Between 2004-2007 Peru enjoyed a cycle of sustained growth of nearly 7% annually, thanks to continuous decade-long liberal economic policy. These focused mainly on maintaining monetary stability and fiscal balance, as well as a very open trade policy, aiming to sign the maximum number of free trade agreements (including with the EU, signed in April 2011) and position Peru as a regional hub for trade between Latin America and the APEC countries.

After experiencing a significant slowdown in 2009, due to the effect of the drop in global trade, the price fall in raw materials and the reduction of domestic demand, the economy of Perou has recovered to become one of the strongest in Latin America in 2014. Thanks to its solid base, the country gave proof of a strong endurance in face of the crisis, the government had set up counter-cyclical measures and controlled the adapted monetary means. The revival was quick and vigorous in 2010 with a growth of over 8.8%. It continued the following year with a 14th consecutive year of growth at 5.4% in 2013 (after 5.5% in 2012) supported by the revival of global trade, the dynamism of domestic demand and the performance of investments.

Despite the fears of the effects of a new international crisis on external demand, the outlook of the Peruvian economy is now very good. The IMF - who characterized Peru as "the new star of Latin America" - maintains its forecast of a 2014 growth rate (5.4%) which should make Peru a leader among the regional economies.

In spite of the progress achieved by Peru, 34% of the population still lives below the poverty line in 2014, under-employment affects around 60% of the population, unemployment has reached 6% in 2013 and the informal economy still represented 70% of employment. There is a strong concentration of wealth and significant inequalities in this country.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 170.60192.67202.42208.19217.61
GDP (Constant Prices, Annual % Change) 6.56.05.8e3.6e5.1
GDP per Capita (USD) 5,6856,32366,625e6,819
General Government Balance (in % of GDP) 0.11.2-0.00.30.9
General Government Gross Debt (in % of GDP) 23.221.220.0e19.3e19.2
Inflation Rate (%) 3.43.72.83.2e2.3
Unemployment Rate (% of the Labor Force) 7.76.87.56.06.0
Current Account (billions USD) -3.18-6.28-9.13e-10.89-10.84
Current Account (in % of GDP) -1.9-3.3-4.5-5.2e-5.0

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture contributes more than 6.2% to the country’s GDP and employs less than 1% of the active population. The main agricultural products are cotton, sugarcane, coffee, wheat, rice, corn and barley.

The industry sector has generated 37.5% of the GDP in 2013, employing 25% of the active population. Peru has a large mining industry, which was privatized in the1990s and attracts significant investments. Peru is the world’s first producer of silver, the fifth largest producer of gold, the third producer of copper, and an important supplier of zinc and lead. The country also has large reserves of natural gas and oil, even though, Peru is a net energy importer.

The main manufacturing activities are textiles, consumer goods, food processing and fish products. Peru is the world's first exporter of fish meal and asparagus. 

The tertiary sector contributes to 56.3% of the GDP and employs around 75% of the population. The tourism sector is very well developed.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 25.8 17.4 56.8
Value Added (in % of GDP) 7.3 41.1 51.6
Value Added (Annual % Change) 2.7 5.9 25.0

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Peruvian Nuevo Sol (PEN) - Average Annual Exchange Rate For 1 USD 3.012.832.752.642.70

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Peru on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
67.4/100
Position:
Moderately Free
World Rank:
47/178
Regional Rank:
7/29

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.40
World Rank:
49/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Peru is a member of the WTO and it is very open to international trade which represents more than 45% of the GDP. Its economy benefits substantially from the Trade Promotion Agreement (TPA) with the United States. 

Peru’s three main export partners are China (around 17% of total export in 2013), the United States and Switzerland. The main export commodities are ores, precious stones, copper and oil. The country is exposed to the fluctations of primary ressources prices. Export decreased by 9% in 2013, due to collapse of prices.

In 2013, its three main suppliers were the United States (over 19% of the country imports), China and Brazil. Peru mainly imports fuels, machinery, electronic equipment, plastic products and vehicles. Structurally positive, Peru's trade balance should continue to strengthen with the rise in exports in 2014.

The United States remains Peru's largest trading partner in 2013. A free trade agreement between the two countries was signed in 2006 and came into force on February 1, 2009. Moreover, about one million Peruvians are registered in the Peruvian consulates in the United States, the primary destination of the Peruvian Diaspora.

China is Peru's largest trading partner since 2013, increasing year after year its trade with the country due to the effects of a free-trade agreement who came into force in 2010.

Although the EU is also a major trading, investment and developmental assistance partner, it only ranks third among Peru's trading partners.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 21,86530,12638,01142,27443,669
Exports of Goods (million USD) 26,88535,56546,26845,63941,826
Imports of Services (million USD) 4,6195,8886,3447,2317,503
Exports of Services (million USD) 3,5173,5524,2214,9845,662
Imports of Goods and Services (Annual % Change) -16.726.111.611.33.6
Exports of Goods and Services (Annual % Change) -0.71.36.93.7-0.9
Imports of Goods and Services (in % of GDP) 21.223.525.625.124.6
Exports of Goods and Services (in % of GDP) 25.226.629.726.623.7
Trade Balance (million USD) 6,1537,1759,9275,970613
Trade Balance (Including Service) (million USD) 4,7754,4046,9802,812-1,841
Foreign Trade (in % of GDP) 46.450.055.251.848.4

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 17.8%
China 17.5%
Switzerland 7.2%
Canada 6.5%
Japan 5.3%
See More Countries 45.6%
Main Suppliers
(% of Imports)
2013
United States 20.3%
China 19.4%
Brazil 5.4%
Ecuador 4.5%
Mexico 4.2%
See More Countries 46.3%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 19.2%
Copper ores and concentratesCopper ores and concentrates 18.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.9%
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 5.0%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 3.8%
See More Products 46.0%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 7.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.3%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 4.1%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 3.6%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 2.2%
See More Products 75.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
51.80%
23.83%
9.15%
7.05%
2.86%
2.84%
1.16%
0.90%
0.22%
0.20%
- bn USD of services imported in 2012
38.61%
20.16%
18.66%
9.85%
3.11%
3.00%
2.43%
2.13%
1.17%
0.57%
0.32%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Economy and Finances
Statistical Office
National Institute of Statistics (in Spanish)
Central Bank
Central Reserve Bank of Peru
Stock Exchange
Lima Stock Exchange (in Spanish)
Search Engines
The Search Beat
Peruvian general search engine
Economic Portals
Business News Americas
Observatório de la Economía de Perú
Economía latino-americana
Information about commerce, trade, import-export
Peru Info

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Political Outline

Executive Power
President is both the chief of the state and head of the government. President is the commander-in-chief of the armed forces and holds executive powers which include implementation of the law and running the day-to-day affairs of the country. President is quite powerful. President is elected by popular vote for a five-year term. The President appoints the Council of Ministers (cabinet) and Prime Minister to serve for five-year terms. All Presidential decree laws or draft bills sent to parliament must be approved by the Council of Ministers.
Legislative Power
The legislature is unicameral Peru. The parliament called Congress consists of 120 seats, with its members elected by popular vote to serve five-year terms. President has the power to veto acts of the legislature, and in turn a supermajority (generally two-thirds majority) of legislators may act to override the veto. The president has the power to block legislation with which the executive branch does not agree. The people of Peru enjoy considerable political rights.
Main Political Parties
Peru has a multi-party system. As a result it is difficult for a single political party to obtain an absolute majority in the Congress. Thus political parties often work with each other to form coalition governments. The main political parties in the country are:
- PAP (Peruvian Aprista Party, also referred to by its original name APRA- American Popular Revolutionary Alliance) – a left wing social democratic party,
- UPP (Union for Peru) – a liberal political party,
- UN (National Unity) – a right-wing Christian democratic political party,
- Change-90 - a political a party having strong base in industrial workers.
Current Political Leaders
President: Ollanta HUMALA (since July 2011) – Gana Peru. The president is both the chief of state and head of government.
Prime Minister: Ana JARA (since 22 July 2014) - Gana Perú.
Next Election Dates
Presidential: April 2016
Congress: April 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
104/180
Evolution:
1 place up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: January 2015