Peru Economy

Peru economic overview

Volatile economic growth trajectory:

Located on the western coast of South America, Peru boasts the sixth-largest economy in Latin America, with a GDP of over USD 250 billion and a population of 34 million. It is classified as an upper-middle-income economy by the World Bank, though GDP per capita is still below the Latin American average. Peru's economy experienced significant growth in the decade leading up to the pandemic, often exceeding 4% year on year. However, the economy saw a double-digit contraction in 2020, and eked out soft growth in 2022 and 2023 below the Latin America average, weighed on by socio-political instability.

Free trade promoter:

Peru is an active promoter of free trade, being a member of the Andean Community along with Bolivia, Colombia, Ecuador, part of the Pacific Alliance together with Chile, Colombia and Mexico, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Peru also has trade deals in place with the EU and the U.S.

Large mining sector:

Peru's economy is characterized by its reliance on natural resource exports, particularly mining, as well as a growing services sector. Peru is the world's second-largest copper producer, and is also an important producer of gold and zinc. That said, mining activity has been periodically disrupted in recent years by protests by local communities; these protests are also weighing on investment in the sector.

Chronic political instability:

Peru's congress is highly fragmented, with dozens of political groupings enjoying parliamentary representation, making policymaking difficult. Moreover, congress has in recent years frequently removed sitting presidents; the country has seen four presidents since 2020. This is hampering structural economic reforms and holding back investment.

Challenges:

In addition to the aforementioned political instability, the Peruvian economy faces challenges including social unrest, a weak education system, exposure to fluctuations in commodity prices and vulnerability to extreme weather events—including the El Niño climate phenomenon, which tends to bring heavy rains.

Peru's economic outlook:

Peru still holds significant potential for growth, given its growing consumer market, abundant natural resources, attractiveness as a tourism destination and large web of trade agreements. Our Consensus is for growth to return to rates above the regional average in the coming years, though the economy will remain restrained by political disfunction.

Peru's economy in numbers:

Nominal GDP of USD 267 billion in 2023.

Nominal GDP of USD 245 billion in 2022.

GDP per capita of USD 7,169 compared to the global average of USD 10,589.

GDP per capita of USD 7,914 compared to the global average of USD 10,589.

Average real GDP growth of 2.6% over the last decade.

Average real GDP growth of 3.2% over the last decade.

Economic structure:

In 2020, services accounted for 62% of overall GDP, manufacturing 12%, other industrial activity 18%, and agriculture 8%. Looking at GDP by expenditure, private consumption accounted for 61% of GDP in 2021, government consumption 14%, fixed investment 23%, and net exports 2%.

International trade:

In 2020, manufactured products made up 9% of total merchandise exports, mineral fuels 4%, food 26%, ores and metals 44% and agricultural raw materials 1%, with other categories accounting for 16% of the total. In the same period, manufactured products made up 74% of total merchandise imports, mineral fuels 9%, food 14%, ores and metals 1% and agricultural raw materials 1%, with other goods accounting for 1% of the total. Total exports were worth USD 66 billion in 2022, while total imports were USD 56 billion.