Peru has a market oriented economy. Growth from 1997 to 2006 averaged 4.5%, in 2007 the economy grew 9% and in 2008 9.8% making it the fastest growing economy in Latin America[1]. In 2009 due to world recession and low commodity prices growth slowed down to 1% and for 2010 it is expected a robust growth in the economy. Peru adopted a market economy in the early 1990s during the government of Fujimori. After a period of hyperinflation, stagnation, price controls and limitation of foreign investment the economy was opened to new investment and to market forces. In 1990 inflation reached 7,481.69% and in 2010 it is estimated to reach 1.2%.[2]These macroeconomic policies and market reforms have been maintained by the succeeding governments of Toledo and Garcia.

Peru’s Consumer Price Inflation rates from 1988 to 2010est
Year	% Rate	Year	% Rate	Year	% Rate
1988	666.96	1996	11.42	2004	3.66
1989	3398.27	1997	8.63	2005	1.62
1990	7481.69	1998	7.28	2006	2.00
1991	419.53	1999	3.52	2007	1.78
1992	73.53	2000	3.88	2008	5.79
1993	48.44	2001	2.02	2009	3.20
1994	23.42	2002	0.16	2010	1.20 est
1995	11.06	2003	2.26
International Monetary Fund – 2009 World Economic Outlook

By the end of 2007 the country’s GDP reached $bn92.4 and its GDP per head $4,420, still below the $7,500 average in Latin America. About 35% of its population is poor and 11% is extremely poor. Peru spends 4.3% of its GDP in health and 2.5% in education.[3]

Its economy is driven by services which account for 53.2% of its GDP, followed by industry 26.2% and agriculture 8.7%. Peru has a positive trade balance of bn$8.9 as of 2007[4]. Its exports have seen a dramatic increase in value in the past years due to increased demand in Asia and high world prices of its main commodities, such as copper, gold and zinc. Its main export destinations are United States, European Union, China, Canada and Chile. Its main origins of imports are United States, Brazil, Ecuador and China.

Origins of GDP	% of total	Components of GDP	% of total
Agriculture	8.7	Private consumption	61.5
Industry	11.1	Public consumption	9.6
Manufacturing	15.1	Investment	18.5
Services	53.2	Exports Impororts	28.7 -19.6
The Economist World in Figures. 2007 Edition

Peru’s unemployment rate from 1997 to 2007 was on average 8.8%. In 2008 it reached 6.9%, in 2009 8.1% and it is estimated in 2010 to reach 9%.[5] Peru’s high unemployment rate is affected by its informal economy. About 76%of Peruvians are employed in the service sector, 23% in industry and 1% in agriculture.[6]

---

[1] CIA World Factbook

[2] International Monetary Fund – 2009 World Economic Outlook

[3] The Economist World in Figures 2009 edition

[4] The Economist World in Figures 2009 edition

[5](Spanish) Instituto Nacional de Estadistica e Informatica

[6] The Economist World in Figures 2009 edition

.

Related Information

.

Competitiveness of the Peruvian Economy

Some of the reasons why the Peruvian economy remains relatively inefficient are structural: the informal economy, lack of infrastructure, high payroll taxes, lack of access to credit, badly designed taxes and lack of competition.

Peru Trade

Much of the economy depends on the international price of its main commodities, its main export is copper. Its main market is the United States which accounts for 23.6% of its total exports.

Two hundred years of hope

Peru follows the same economic trend as many other countries in Latin America basically, periods of economic recovery followed by periods of bad policy, political instability and economic decline.

Facts about Peru

Interesting facts about Peru

.

Back to Home page

Tags: copper, gold, inflation in Peru, Lima, minerals in Peru, Peru, Peru economy, Peru exports, poverty in Peru