Peru Economic Data & Projections

Peru Economic Outlook

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 Macroeconomic Analysis:

Nominal GDP of USD 268 billion in 2023.

GDP per capita of USD 7,931 compared to the global average of USD 10,589.

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

Sector Analysis

In 2022, services accounted for 50% of overall GDP, manufacturing 12%, other industrial activity 31%, and agriculture 7%. Looking at GDP by expenditure, private consumption accounted for 64% of GDP in 2023, government consumption 14%, fixed investment 19%, and net exports 3%.

International trade

In 2020, manufactured products made up 10% of total merchandise exports, mineral fuels 11%, food 23%, ores and metals 43% and agricultural raw materials 1%, with other categories accounting for 12% of the total. In the same period, manufactured products made up 66% of total merchandise imports, mineral fuels 18%, food 12%, ores and metals 2% and agricultural raw materials 1%, with other goods accounting for 1% of the total. Total exports were worth USD 68 billion in 2023, while total imports were USD 50 billion.