Peru Economy Facts
Peru’s economy has long been strong, but poverty is widespread. Good export income from, among other things, large-scale mining and extensive fishing mainly benefits a smaller part of society. The population of the mountains and the slums of cities often live in self-sufficiency and find their livelihood outside the formal economy.
More than 60 percent of export income comes from the mining industry, which together with other industries accounts for just over a third of GDP. By far the most important among the minerals is copper. Tourism is a growing source of income. The public sector has lost much weight and today accounts for a much smaller part of the economy than it did 25 years ago.
- Countryaah.com: Major imports by Peru, covering a full list of top products imported by the country and trade value for each product category.
The informal sector is believed to be at least as large as the legal economy. An important contribution to the economy is the money that Peruvians abroad send home to the family.
Since the turn of the millennium, Peru has experienced uninterrupted growth, which was second highest in Latin America after Panama. This is primarily due to rising commodity prices but also to a growing domestic consumption that has caused the wheels to spin in the construction industry, other industry and trade.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including PER which represents the country of Peru. Check findjobdescriptions to learn more about Peru.
Through the large influx of foreign investment, Peru has been able to build up a large reserve of foreign currency.
Growth has led to increased tax revenue for the state, but seen from a regional perspective, the tax burden is low. The state also misses some tax revenue as tax evasion is suspected to be a common occurrence.
When Left candidate Ollanta Humala took office as president in the summer of 2011, many feared that he would start pursuing an economic policy characterized by major government intervention, but he instead pursued a market-friendly policy. Promising that economic policy would take greater account of citizens’ social needs, he tried to fulfill some of this by using the increased tax revenues for social projects, but voters were still dissatisfied with the pace of reform.
One problem in this context is the lack of structures that exist in rural areas to handle possible development grants. During Humala’s years in power, growth also slowed, with a fall in government revenue as a result. The economic situation pushed him to try to accelerate foreign exploitation in sensitive areas, which led to conflict with local groups.
President Fujimori’s crisis program in the early 1990s (see Modern History) led to a slowing of inflationary inflation and a more balanced budget, but the price deteriorated for the Peruvians. This was partly due to abolished subsidies that led to higher prices for goods and services and partly to the disappearance of hundreds of thousands of jobs within the state bureaucracy.
The deregulated economy contributed to stable growth in 1994-1997 and the sale of several state-owned companies attracted many foreign investors to Peru. The economy deteriorated again from 1998, when fishing and agriculture were affected by the weather phenomenon of El Niño (see Geography and climate), while financial crises in the outside world and political turmoil affected trade and investment.
Following the global downturn in 2001, the economy developed strongly under the rest of Alejandro Toledo’s government until 2005: GDP grew by over five percent per year. Large foreign investments in mines and natural gas produced positive results, while increased foreign demand drove up commodity prices. Toledo was not able to create many new jobs or increase wealth for the poor, while the successor Alan García, president from mid-2006, succeeded somewhat better, including through a number of construction projects and welfare programs. Although government revenues had continued to grow, dissatisfaction with García’s liberal market policy increased, which, according to trade unions, only benefited businessmen and multinational companies. More and more strikes and demonstrations were carried out in 2008 in protest of rising prices and what was called a neoliberal policy.
Growth reached a peak of almost ten percent in 2008, but with the global financial crisis that developed the same year, export income and investment fell rapidly, but inflation, which had increased for some time. However, Peru managed the crisis relatively well thanks to strong government finances and a large foreign exchange reserve. Despite the crisis, GDP also grew somewhat in 2009. The following year the trend reversed and growth reached just over 8 percent, but then slowed slightly.
FACTS – FINANCE
GDP per person
US $ 6,947 (2018)
US $ 222,238 million (2018)
4.0 percent (2018)
Agriculture’s share of GDP
6.7 percent (2017)
Manufacturing industry’s share of GDP
12.8 percent (2017)
The service sector’s share of GDP
54.1 percent (2017)
2.2 percent (2019)
Government debt’s share of GDP
26.2 percent (2018)
US $ 68,083 million (2017)
US $ 49,066 million (2018)
US $ 41,553 million (2018)
– US $ 3,594 million (2018)
Commodity trade’s share of GDP
41 percent (2018)
Main export goods
copper, gold, oil and oil products, agricultural products and fish
Largest trading partner
Former presidential candidate is prosecuted
Former presidential candidate Ollanta Humala is charged with murder and torture during the fight against guerrillas in the 1990s. Later in the year, he is also charged with soliciting rebellion (see January 2005). He is eventually released from all charges. His brother Antauro, who led the 2005 uprising, is later sentenced to 25 years in prison.
Alan García wins the presidential election
In the second round of the presidential election, Alan García wins Ollanta Humala, with 52.6 percent of the vote. García was previously President from 1985 to 1990.
Congressional elections and first round of presidential elections
In the first round of the presidential election, the left candidate Ollanta Humala receives 30.6 percent of the vote and ex-president Alan García of the Social Democratic Apra Party 24.3 percent. Trean Lourdes Flores gets 23.8 percent. The parliamentary election results in a victory for an alliance between the Union Party of Peru (UPP) and the Humalas Nationalist Party (PNP). The collaboration breaks down shortly thereafter.
Former President Alberto Fujimori is arrested in Chile where he arrived from his refuge in Japan.
Victims of war receive damages
The government begins to pay compensation to victims of the guerrilla war in the 1980s and 1990s.
Insurgent officer demands the resignation of the president
The regime introduces an emergency permit in a province where about 150 reserve officers occupied a police station and took hostages. The group’s leader, the former Major Antauro Humala, demands that President Toledo resign. Humala is arrested during negotiations with the security forces. In 2000, he had also participated in an uprising against Fujimori’s rule with his brother, the retired Colonel Ollanta Humala.