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 295 billion in 2024.
Nominal GDP of USD 289 billion in 2024.
Nominal GDP of USD 268 billion in 2023.
GDP per capita of USD 7,931 compared to the global average of USD 10,589.
GDP per capita of USD 8,486 compared to the global average of USD 10,589.
GDP per capita of USD 8,653 compared to the global average of USD 10,589.
Average real GDP growth of 2.4% over the last decade.
Average real GDP growth of 2.4% over the last decade.
Average real GDP growth of 2.6% over the last decade.
Sector Analysis
In 2022, services accounted for 49.6% of overall GDP, manufacturing 12.4%, other industrial activity 30.9%, and agriculture 7.1%. Looking at GDP by expenditure, private consumption accounted for 64.3% of GDP in 2023, government consumption 13.7%, fixed investment 18.8%, and net exports 3.2%.International trade
In 2022, manufactured products made up 9.9% of total merchandise exports, mineral fuels 10.7%, food 22.7%, ores and metals 43.1% and agricultural raw materials 1.0%, with other categories accounting for 12.6% of the total. In the same period, manufactured products made up 66.3% of total merchandise imports, mineral fuels 18.4%, food 11.9%, ores and metals 2.1% and agricultural raw materials 1.2%, with other goods accounting for 0.1% of the total. Total exports were worth USD 75.90 billion in 2024, while total imports were USD 52.10 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 2.6% in the decade to 2023. To read more about GDP growth in Peru, go to our dedicated page.
Fiscal policy
Peru's fiscal deficit averaged 2.4% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 7.7% in the decade to 2024. For more information on Peru's unemployment click here.
Inflation
Inflation averaged 3.5% in the decade to 2024. Go to our Peru inflation page for extra insight.
Monetary Policy
Peru's monetary policy rate ended 2024 at 5.00%, up from 3.50% a decade earlier. See our Peru monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the sol weakened by 21.1% vs the U.S. dollar. For more info on the sol, click here.
Economic situation in Peru
Annual GDP growth lost momentum in Q1 from Q4 2024 but stayed strong by Latin America standards, bolstered by strong metal mining activity, a larger anchovy catch, interest rate cuts and higher real wages. Turning to Q2, our panelists expect the economy to be losing further momentum, hampered by a higher base of comparison and U.S. protectionism. That said, economic growth should remain above the regional average on the back of strong labor market conditions: The unemployment rate declined in April from Q1 levels, and real wage growth remained robust compared to the pre-Covid decade average. In other news, in June, Peru's government restored formal mining operations in northern parts of the country—home to most of the country’s gold and silver mines—after they were disrupted by violence in May. This bodes well for exports, as non-monetary gold accounts for over 10% of total goods shipments.Peru Economic Forecasts
Projections out to 2034.53 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 44 expert analysts.
Want to get insight on the economic outlook for Peru in the coming years? FocusEconomics collects projections out to 2034 on 53 economic indicators for Peru from a panel of 44 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Peru economy. To download a sample report on the Peru's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Peru Economic Indicators
Q&A:
How is the economy in Peru?
Peru's economy has been dynamic in the last few decades but faces challenges. It benefits from rich natural resources, particularly in mining and agriculture, and has seen growth in sectors like manufacturing and tourism. However, it grapples with issues like income inequality, political instability, and reliance on commodity exports, which can be volatile.
Does Peru have a strong economy?
Peru has a growing economy with strong sectors in mining, agriculture, and fisheries. Peru is classified as an upper-middle-income economy by the World Bank and is a member of the Pacific Alliance and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, its economy faces challenges like income inequality, a chaotic political panorama and reliance on volatile commodity exports.
Does Peru have natural resource wealth?
Yes, Peru has abundant natural resource wealth, with copper, gold and iron among the country's top exports.