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Peru

Published on Thursday,16 July 2015

1.Overview

Over the past five years, Peru has made great strides in its  development. Its achievements include: high growth rates, low inflation,  macroeconomic stability, reduction of external debt and poverty and  significant advances in social and development indicators, among others.


Prudent macroeconomic policies and a favorable external environment  enabled an average GDP growth rate of 6.3 percent between 2002 and 2010.  This strong economic performance enabled a continuous recovery of  Peru’s income per capita, which increased by more than 50 percent during  the decade, after almost 30 years of stagnation.


This stellar growth was temporarily halted by the global economic  crisis that affected Peru, as it did practically all countries around  the world. Nevertheless, in 2010, Peru experienced a strong recovery and  the economy grew at pre-crisis rates.


Inflation has been under strict control with an inflation targeting  rule set at 1-3 percent (BCRP).  The country embarked on a series of  reforms of which fiscal consolidation, trade openness, exchange rate  flexibility, financial liberalization, higher reliance on market signals  and prudent monetary policy, including strong buildup of reserves, have  been key components. Fiscal prudence was further buttressed in recent  years by high commodity prices.


In 2010, public debt as a share of GDP was 23.3 percent of GDP,  including local government debt. In recognition of the lower risk that  Peruvian sovereign debt represents, Standard & Poor’s and Fitch  raised their long-term foreign currency sovereign credit rating for Peru  to 'BBB' from 'BBB-'.


Exports have grown from an average of US$6.3 billion (1998- 2000) to an  average of US$28.8 billion (2007-2009), i.e. an increase of almost five  times in nominal terms over a single decade. Commodity exports account  for more than half of Peru‘s total exports. About 33 percent of Peru‘s  exports are destined for China and the European Union and 13 percent to  USA. Peru is sensitive to changes in commodity prices and their impact  on natural resource revenue, but the country remains relatively less  exposed to those revenues than other countries in the region. Deep trade  liberalization measures and tariff reductions resulted in a weighted  average tariff rate of just 1.2 percent. Peru has negotiated free trade  agreements with different trade blocs and countries (e.g., the United  States, China, Chile, South Korea, Japan, the European Free Trade  Association countries, the European Union, Mexico, Panama and Costa  Rica).


Despite these advances, Peru faces many challenges. One of the most  crucial is the equitable sharing of these achievements, in other words,  promoting more inclusive economic growth. The effects of strong growth  have yielded an important decline in poverty rates –about seven million  people exited poverty between 2004 and 2010. However, disparities across  the country remain high, particularly between rural and urban areas. In  2010, while the national poverty rate was only 30.8 percent, it stood  at approximately 61 percent in rural areas.


President Humala assumed office in July 2011, with a vision of  maintaining strong economic growth and an emphasis on improving equity.  The Government's program aims to provide equal access to basic services,  employment and social security; reduce extreme poverty; prevent social  conflicts; improve the surveillance of potential environmental damages;  and reconnect with rural Peru through an extensive inclusion agenda.
 

2.Statistics

Population, total (millions)

29.1

Population growth (annual %)

1

Surface area (sq. km) (thousands)

1,285.22

Life expectancy at birth, total (years)

74

Mortality rate, infant (per 1,000 live births)

15

GNI (current US$) (billions)

147.0

GNI per capita, Atlas method (current US$)

4,700

Unemployment, total (% of total labor force)

6

External debt stocks (% of GNI)

25

Literacy rate, adult female (% of females ages 15 and above)

85

Literacy rate, adult male (% of males ages 15 and above)

95

CO2 emissions (metric tons per capita)

1

Source: World Bank


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