Economy of Peru

Economy of Peru
Lima, the financial centre of Peru
CurrencyPeruvian sol (PEN, S/)
calendar year
Trade organizations
CPTPP, APEC, CAN, Pacific Alliance, WTO, Prosur, Mercosur (associate)
Country group
Statistics
GDP
  • Increase $282 billion (nominal, 2024)[3]
  • Increase $567 billion (PPP, 2024)[3]
GDP rank
GDP growth
  • Increase 2.7% (2022)[4]
  • Increase 2.4% (2023f)[4]
  • Increase 3.0% (2024f)[4]
GDP per capita
  • Increase $8,291 (nominal, 2024)[3]
  • Increase $16,631 (PPP, 2024)[3]
GDP per capita rank
GDP by sector
1.9% (2020 est.)[3]
Population below poverty line
Positive decrease 40.2 medium (2021, World Bank)[9]
Labor force
  • Increase 18,818,406 (2019)[11]
  • Decrease 65.5% employment rate (2018)[12]
Labor force by occupation

(2019)[13]

Unemployment
  • Negative increase 6.9% (2017 est.) note: data are for metropolitan Lima; widespread underemployment[5]
  • Positive decrease 3.6% (2012)[14]
Main industries
External
ExportsIncrease $44.92 billion (2017 est.)[5]
Export goods
(2018)[15]
Main export partners
ImportsIncrease $43.13 billion (2018)[15]
Import goods
[15]
Main import partners
FDI stock
  • Increase $98.24 billion (31 December 2017 est.)[5]
  • Increase Abroad: $5.447 billion (31 December 2017 est.)[5]
Increase −$2.414 billion (2017 est.)[5]
Positive decrease $66.25 billion (31 December 2017 est.)[5]
Public finances
Negative increase 25.4% of GDP (2017 est.)[5]
−3.1% (of GDP) (2017 est.)[5]
Revenues58.06 billion (2017 est.)[5]
Expenses64.81 billion (2017 est.)[5]
Economic aid$27.267 million (2018 est.)[16]
Increase $63.83 billion (31 December 2017 est.)[5]
All values, unless otherwise stated, are in US dollars.

The economy of Peru is an emerging, mixed economy characterized by a high level of foreign trade and an upper middle income economy as classified by the World Bank.[21] Peru has the forty-seventh largest economy in the world by total GDP[22] and currently experiences a high human development index.[23] The country was one of the world's fastest-growing economies in 2012, with a GDP growth rate of 6.3%.[24] The economy was expected to increase 9.3% in 2021, in a rebound from the COVID-19 pandemic in Peru.[25] Peru has signed a number of free trade agreements with its main trade partners. China became the nation's largest trading partner following the China–Peru Free Trade Agreement signed on 28 April 2009.[26] Additional free trade agreements have been signed with the United States in 2006,[14][27] Japan in 2011[28] and the European Union in 2012.[29] Trade and industry are centralized in Lima while agricultural exports have led to regional development within the nation.

Peru's economy is dependent on commodity exports, making the economy at risk due to price volatility in the international markets. The Government of Peru displayed little interaction in the public sector throughout the nation's history since the economy frequently experienced commodities booms. The extraction of such commodities has brought conflict within the country due to its environmental and social impacts.[30]

Following the independence of Peru from the Spanish Empire, the economic elite focused their power on the coastal regions through centralismo, while the rural provinces were governed by existing serfdom practices by hacienda landowners.[31][32][33] This model essentially continued until 1968 when General Juan Velasco Alvarado took power, leading a dictatorship that increased social spending and removing the power of landowners, which resulted with a power vacuum in the 1970s that saw the rise of communist guerilla group Shining Path.[31][32] Beginning in the 1980s, Peru faced economic difficulties as a result of the early 1980s recession and the internal conflict in Peru during its Lost Decade. The government of Alan García enacted price controls that resulted in hyperinflation.[30] In response, the armed forces of Peru drafted Plan Verde, an operation to create a neoliberal, open market economy. This was reportedly executed by the government of Alberto Fujimori, beside prescriptions from economist Hernando de Soto, during a period known as "Fujishock".[30][34][35][36] During this shock, price controls were discontinued, the privatization of state-run organizations occurred and the promotion of foreign investments happened through the removal of regulations.[30] The economic measures of the Fujimori administration made the country macro-economically stable.

Development in Peru increased following the 2000s commodities boom while government finances, poverty reduction and progress in social sectors improved.[30][37][31][38] The nation has more recently adopted the Lima Consensus, an economic ideology of neoliberalism, deregulation and free market policies that has made foreign portfolio investment in Peru attractive.[31][38][39] Inflation in 2012 was the lowest in Latin America at 1.8%,[40] with the most recent annual rate standing at 1.9% in 2020.[3] Though statistical poverty has decreased significantly – from nearly 60% in 2004 to 20.5% in 2018.

Peruvian economic performance has been tied to exports, which provide hard currency to finance imports and external debt payments, though in recent decades the economy has begun to diversify.[30][41] Peru's main exports are copper, gold, zinc, textiles, chemicals, pharmaceuticals, manufactures, machinery, services and fish meal. The country's major trade partners are the United States, China, Brazil, the European Union and Chile.[42] Although exports have provided substantial revenue, self-sustained growth and a more egalitarian distribution of income have proven elusive.[43] Services account for 59.9% of Peruvian gross domestic product, followed by industry (32.7%) and agriculture (7.6%).[44] Recent economic growth has been fueled by macroeconomic stability, improved terms of trade, as well as rising investment and consumption.[45]

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". World Bank. Retrieved 29 September 2019.[permanent dead link‍]
  3. ^ a b c d e f "Report for Selected Countries and Subjects: April 2024". imf.org. International Monetary Fund.
  4. ^ a b c "The outlook is uncertain again amid financial sector turmoil, high inflation, ongoing effects of Russia's invasion of Ukraine, and three years of COVID". International Monetary Fund. 11 April 2023.
  5. ^ a b c d e f g h i j k l "CIA World Factbook". Central Intelligence Agency. Retrieved 2 January 2019.
  6. ^ Gestión, Redacción (11 July 2019). "Perú fue el país con mayor reducción de la pobreza multidimensional en la última década". Gestión (in Spanish). Retrieved 2 February 2020.
  7. ^ "Peru | Data". World Bank. Retrieved 16 April 2018.
  8. ^ "Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population) – Peru". World Bank. Retrieved 21 March 2020.
  9. ^ "GINI index (World Bank estimate)". World Bank. Retrieved 21 March 2020.
  10. ^ a b "Human Development Report 2023/2024" (PDF). United Nations Development Programme. 13 March 2024. Archived (PDF) from the original on 13 March 2024. Retrieved 18 May 2024.
  11. ^ "Labor force, total – Peru". World Bank. Retrieved 12 January 2020.
  12. ^ "Employment to population ratio, 15+, total (%) (national estimate) – Peru". World Bank. Retrieved 24 October 2019.
  13. ^ "Employment in services (% of total employment) (modeled ILO estimate) – Peru, Korea, Rep. Data". World Bank. Retrieved 7 May 2021.
  14. ^ a b "Unemployment, total (% of total labor force)". World Bank. Retrieved 13 March 2014.
  15. ^ a b c d e "Peru Trade Summary 2018 Data". World Bank. Retrieved 7 December 2020.
  16. ^ "U.S. Foreign Aid by Country". explorer.usaid.gov. Archived from the original on 8 January 2021. Retrieved 20 September 2019.
  17. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 17 April 2014.
  18. ^ "S&P Global Ratings revised outlook on Peru to negative and affirmed at "A-" (Local Currency LT) credit rating". CBonds. Retrieved 24 November 2021.
  19. ^ "Moody's affirms Peru rating but unrest triggers negative outlook". Reuters. 31 January 2023. Retrieved 1 February 2023.
  20. ^ "Fitch Downgrades Peru to 'BBB'; Outlook Stable". Fitch Ratings. 15 October 2021. Retrieved 24 November 2021.
  21. ^ The World Bank, Data by country: Peru. Retrieved 1 October 2011.
  22. ^ "Rank Order – GDP (purchasing power parity)". CIA. Archived from the original on 14 March 2014. Retrieved 13 March 2014.
  23. ^ "Human Development Reports – Peru". United Nations Development Programme. Retrieved 13 March 2014.
  24. ^ "Peru". World Bank. Retrieved 13 March 2014.
  25. ^ "Moody's advierte sobre efectos de "deterioro institucional" en Perú". Infobae (in European Spanish). 2 December 2020. Retrieved 7 December 2020.
  26. ^ El Comercio, Peru's main daily newspaper China and Peru Sign Trade Promotion Agreement, 28 April 2009. Retrieved 19 April 2014.
  27. ^ Office of the U.S. Trade Representative, United States and Peru Sign Trade Promotion Agreement Archived 6 May 2009 at the Wayback Machine, 4 April 2006. Retrieved 15 May 2007.
  28. ^ "El Perú firmó hoy TLC con Japón tras seis rondas de negociación" [Peru signed an FTA with Japan today after six rounds of negotiation]. El Comercio Perú. 20 April 2014. Archived from the original on 20 April 2014. Retrieved 14 March 2021.
  29. ^ "Perú suscribió TLC con la Unión Europea | LaRepublica.pe". 20 April 2014. Archived from the original on 20 April 2014. Retrieved 7 December 2020.
  30. ^ a b c d e f "Peru seeks to maintain growth as demand for commodities falls". Oxford Business Group. 14 February 2016. Archived from the original on 10 April 2021. Retrieved 7 December 2020.
  31. ^ a b c d Orihuela, José Carlos (January–June 2020). "El consenso de Lima y sus descontentos: del restringido desarrollismo oligarca a revolucionarias reformas estructurales". Revista de historia. 27 (1). Concepción, Chile: 77–100.
  32. ^ a b Levitsky, Steven (Fall 2014). "First Take: Paradoxes of Peruvian Democracy: Political Bust Amid Economic Boom?". ReVista. Archived from the original on 22 November 2014. Retrieved 23 February 2022.
  33. ^ Cite error: The named reference :5 was invoked but never defined (see the help page).
  34. ^ "El "Plan Verde" Historia de una traición". Oiga. 647. 12 July 1993.
  35. ^ Cameron, Maxwell A. (June 1998). "Latin American Autogolpes: Dangerous Undertows in the Third Wave of Democratisation". Third World Quarterly. 19 (2). Taylor & Francis: 228–230. doi:10.1080/01436599814433. The Plan Verde bore a striking resemblance to the government outlined by Fujimori in his speech on 5 April 1992. It called for a market economy within a framework of a 'directed democracy' that would be led by the armed forces after they dissolved the legislature and executive. ... The authors of the Plan Verde also stated that relations with the USA revolved more around the issue of drug trafficking than democracy and human rights, and thus made the fight against drug trafficking the number two strategic goal
  36. ^ Burt, Jo-Marie (September–October 1998). "Unsettled accounts: militarization and memory in postwar Peru". NACLA Report on the Americas. 32 (2). Taylor & Francis: 35–41. doi:10.1080/10714839.1998.11725657. the military's growing frustration over the limitations placed upon its counterinsurgency operations by democratic institutions, coupled with the growing inability of civilian politicians to deal with the spiraling economic crisis and the expansion of the Shining Path, prompted a group of military officers to devise a coup plan in the late 1980s. The plan called for the dissolution of Peru's civilian government, military control over the state, and total elimination of armed opposition groups. The plan, developed in a series of documents known as the "Plan Verde," outlined a strategy for carrying out a military coup in which the armed forces would govern for 15 to 20 years and radically restructure state-society relations along neoliberal lines.
  37. ^ The World Bank, Countries: Peru Archived 30 October 2019 at the Wayback Machine. Retrieved 1 October 2011
  38. ^ a b Tegel, Simeon. "How Peru Laid the Groundwork for an Oil Spill Disaster". Foreign Policy. Retrieved 23 February 2022.
  39. ^ Peru Country Risk Report – Q3 2021. London: Fitch Solutions. 2021.
  40. ^ "Peru and the IMF". International Monetary Fund.
  41. ^ Rosemary Thorp and Geoffrey Bertram, Peru 1890–1977, p. 4.
  42. ^ 2006 figures. (in Spanish) Banco Central de Reserva, Memoria 2006 Archived 17 December 2008 at the Wayback Machine, pp. 60–61. Retrieved 3 July 2007.
  43. ^ Rosemary Thorp and Geoffrey Bertram, Peru 1890–1977, p. 321.
  44. ^ "South America :: Peru — The World Factbook – Central Intelligence Agency". Central Intelligence Agency. 2017. Retrieved 7 December 2020.
  45. ^ (in Spanish) Banco Central de Reserva, Memoria 2006 Archived 17 December 2008 at the Wayback Machine, pp. 15, 203. Retrieved 25 June 2007.