29907003
Spanish (official) 84.1%, Quechua (official) 13%, Aymara (official) 1.7%, Ashaninka 0.3%, other native languages (includes a large number of minor Amazonian languages) 0.7%, other (includes foreign languages and sign language) 0.2% (2007 est.)
LIMA (capital) 9.897 million; Arequipa 850,000; Trujillo 798,000 (2015)
- Conventional long form
- Republic of Peru
- Conventional short form
- Peru
- Local long form
- Republica del Peru
- Local short form
- Peru
presidential republic
- Name
- Lima
- Geographic coordinates
- 12 03 S, 77 03 W
- Time difference
- UTC-5 (same time as Washington, DC, during Standard Time)
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, and the dense forest of the Amazon. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and copper.
- Inflation
- 3.596%
- External debt stocks
- US$ 65,938,010,000
- Total tax rate (% of commercial profits)
- 35.6%
- Real Interest Rate
- 12.373%
- Manufacturing, value added (% of GDP)
- 14.501%
- Current Account Balance
- US$ -9,209,589,198
- Labor Force, Total
- 17,068,667
- Employment in Agriculture
- 25.56%
- Employment in Industry
- 22.79%
- Employment in Services
- 76.12%
- Unemployment Rate
- 4.95%
- Imports of goods and services
- US$ 42,948,387,670
- Exports of goods and services
- US$ 43,118,652,098
- Total Merchandise Trade
- 38.05%
- FDI, net inflows
- US$ 7,817,116,455
- Commercial Service Exports
- US$ 5,705,848,630
artichokes, asparagus, avocados, blueberries, coffee, cocoa, cotton, sugarcane, rice, potatoes, corn, plantains, grapes, oranges, pineapples, guavas, bananas, apples, lemons, pears, coca, tomatoes, mangoes, barley, medicinal plants, quinoa, palm oil, marigolds, onions, wheat, dry beans; poultry, beef, pork, dairy products; guinea pigs; fish
mining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing, cement, glass, textiles, clothing, food processing, beer, soft drinks, rubber, machinery, electrical machinery, chemicals, furniture
- Commodities
- copper, gold, lead, zinc, tin, iron ore, molybdenum, silver; crude petroleum and petroleum products, natural gas; coffee, asparagus and other vegetables, fruit, apparel and textiles, fishmeal, fish, chemicals, fabricated metal products and machinery, alloys
- Partners
- China 22.1%, US 15.2%, Switzerland 8.1%, Canada 7% (2015)
- Commodities
- petroleum and petroleum products, chemicals, plastics, machinery, vehicles, TV sets, power shovels, front-end loaders, telephones and telecommunication equipment, iron and steel, wheat, corn, soybean products, paper, cotton, vaccines and medicines
- Partners
- China 22.7%, US 20.7%, Brazil 5.1%, Mexico 4.5% (2015)
- Country Risk Rating
- A4
- A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behavior. Corporate default probability is still acceptable on average.
- Business Climate Rating
- B
- The business environment is mediocre. The availability and the reliability of corporate financial information vary widely. Debt collection can sometimes be difficult. The institutional framework has a few troublesome weaknesses. Intercompany transactions run appreciable risks in the unstable, largely inefficient environments rated B.
- Strong growth potential
- Member of the Pacific Alliance
- Mineral, energy, agricultural and halieutic resources
- Low public debt and balanced budget
- Independent central bank and sound banks
- Attractiveness for tourists
- Dependence on commodities and Chinese demand
- Sensitivity to the climate and seismicity
- Regional disparities (poverty in the Andean and Amazonian regions)
- Inadequate infrastructure, corporate credit, healthcare and education
- Scale of coca cultivation and cocaine production
- Massive informal sector (75% of employment) which is not in favor of learning
In 2016, growth in Peru was among the strongest in the region. This was driven mainly by the increase in mining production, thanks notably to expansion and the start-up of the Cerro Verde and Las Bambas mines, but also the recovery in public investment and ongoing productivity gains in the agricultural sector. In 2017, activity should remain resilient, boosted mainly by robust performances in the mining sector. The sector is also likely to benefit from the increase in demand and metals prices (copper especially) if the infrastructure programme planned by the new US president were to materialise.
As soon as he came to power in July 2016, the Peruvian president Pedro Pablo Kuczynki requested and obtained permission from Congress for an exception to the budgetary rule that stipulates that the fiscal deficit must not exceed 1% of GDP. The government’s aim is to be able to underpin growth in the short term before returning to the deficit target set by Congress in 2021, the last year of the Kuczynski government. The 2017 budget therefore plans for growth in spending in the fields of education, security and access to drinking water and sanitation. Education spending should reach 4% of GDP vs. an average of 2.5% previously. In terms of security, the government is planning an increase in police wages, as well as the construction and improvement of around 20 prisons. The government is also planning to reduce VAT and certain corporate tax expenses in order to prompt small and medium-sized companies to declare their revenues. This is aimed at reducing the size of the informal sector in the economy and, hence, increasing collection of tax revenues. In this backdrop, public debt is set to rise, while remaining at a low level. The country is also likely to dip into its stabilisation fund (equivalent of almost 5% of GDP) in order to ensure that public finances remain on track.
In terms of foreign trade, the current deficit is set to narrow on the back of higher copper production and exports following the opening of new mines. Exports should also benefit from productivity gains in the agricultural and fishing sector thanks to the dissipation of the effects of El Niño. Peru should therefore maintain its position as the leading global producer of fish meal. Services trade and the balance of revenues should remain in the red due to activity by foreign companies (repatriating profits, transport services). This deficit is comfortably financed by foreign investments. Even if the central bank can rely on a very comfortable stock of exchange rate reserves (around 15.5 months of imports), it will keep a close eye on changes in US monetary policy, in order to avoid excessive volatility on the ground.
On 5 June 2016, Pedro Pablo Kuczynki the candidate for the Peruanos por el cambio party narrowly won the Peruvian presidential elections with 50.1% of votes, against rival Keiko Fujimori, daughter of the former president Fujimori of the Fuerza Popular party. His pro-markets economic programme aims especially at attracting private investment destined mainly for the non-mining sector by cutting red tape and via tax incentives (gradual decline in VAT from 18% to 15%). He is also planning to reduce tax expenses for small and mid-sized companies in order to encourage formal employment and intends to make progress in structural reforms (tax, pensions, legal system). The new president’s work is not set to be easy however: his party only has 18 out of the 130 seats in Congress and will have to forge ties with the other parties, especially the Fuerza Popular (pro-Fujimori) which has the majority (73 out of 130 seats). The business climate is nevertheless tending to improve with the red tape reductions and the anti-corruption decree, which now bans people involved in corruption affairs from holding a civil service position on a national, state or local level.