| Vital statistics |
|---|
| location: Northwest South America |
| neighbor: Bolivia, Brazil, Chile, Colombia and Ecuador |
| Capital: Lima |
| Population (2023): 33.8 million |
| Official language: Spanish |
| GDP per capita (2024): $8,320.00 (nominal) |
| GDP size (2024): $283.31 billion (nominal) |
| Expected GDP growth: 3% (2024) |
| Economic inflation: 3.2% (2023) |
| Unemployment rate: 6.8% (2024) |
| currency: Peru Sol |
| Investment Promotion Agency: ProInversión (State Investment Agency) and PROMPERÚ (Ministry of Foreign Trade and Tourism) |
| Investment incentives: The government’s “Impulso Perú” initiative prioritizes mining and infrastructure projects with legal and tax stabilization agreements to stimulate private investment including exemptions from property taxes, import and export taxes, and personal, corporate and payroll taxes. Tax deferral and withholding tax reduction for real estate investors until 2027. Simplified customs duty return system. |
| Corruption Perceptions Index (2023): 121 (from 180 countries) |
| Credit rating (2024): BBB (S&P), Baa1 (Moody’s), BBB (Fitch) |
| Political risks: Civil protests are common. and political uncertainty with more than 30 parties participating in the 2026 elections. The approval ratings of the President and Congress are very low. High levels of corruption; Corruption scandals led to the downfall of six presidents in the past eight years. |
| Security risks: Tension, social and class disorder. High levels of corruption with bribery are common. Street crimes are common in parts of major cities, including kidnappings and robberies. Cocaine-related organized crime is widespread in some border areas. Parts of the Sendero Luminoso guerrilla group are still active in some of the major coca-growing regions of central Peru. |
| Pros |
|---|
| Strategic geographical location |
| Membership in the Pacific Alliance and Andean Community, strong links with Mercosur |
| Abundance of mineral resources, energy resources, agricultural products, and fish wealth |
| A strong macroeconomic policy framework and central bank independence |
| Low levels of public debt and strong international reserves |
| cons |
|---|
| Relying on raw materials and Chinese demand |
| The presence of a large informal sector and tax evasion contribute to the weak financial situation |
| Exposure to climate shocks |
| The credit system is underdeveloped |
| Highly skewed income distribution and high levels of poverty |
| Weak governance indicators |
| Inadequate infrastructure, healthcare and education systems |
Sources: Allianz, UK Foreign and Commonwealth Office, International Monetary Fund, Moody’s, Standard & Poor’s, Fitch, US State Department, World Bank, COFIS, UNCTAD/UN, BMI, Transparency International, Britannica, World Factbook To the CIA, the World Health Organization.
For more information about Peru, click here to read Global Finance Country reports page.
“Over the past few quarters, Peru’s economy has been driven by mining, manufacturing, construction, and service industries. In early 2024, we see services, including the transportation and warehousing sector, postal and courier, and trade services,” says Julia Sinitsky, Peru country risk analyst at BMI. Businesses are starting to recover, and we expect these sectors to survive through 2025.” – Fitch Solutions.
Monthly data released through August support BMI’s assessment of strong growth through the end of this year. “We saw the August economic activity reading reach 3.5% y/y (0.6% m/m) from 4.5% y/y (1.5% m/m) in July. With economic activity averaging 2.8% m/m Annually through August, we expect growth to reach just under 3% this year, before approaching 2.5% in 2025,” he said, warning there could be some risks to this outlook due to the slowdown. In mining production caused by environmental disturbances, growth in 2024 will reach less than 2.8%.
International Monetary Fund data show Peru is on target to end 2024 with an annual inflation rate of 2.4%, and expects a 2% rate by the end of 2025. Markets had expected a 0.25% cut in the country’s interest rate of 5.25% in October, but the central bank Debt Restructuring (BCRP) Moody’s kept interest rates current for at least another cycle due to stability – a term echoed in Moody’s upgrade of Peru’s outlook in September. Past from “Negative” to “Stable” while affirming the country’s rating at Baa1 for unsecured debts and Aa3 rating for the country’s local/foreign currency ceilings.
The Peruvian currency has also been on a stable path without extreme movements for more than three years. Sinitsky attributes this to the intensive management of financial reform by the Central Bank, which maintains ample foreign reserves sufficient to cover imports for a period ranging from 14 to 17 months.
For Jonathan Kleinberg, director of asset management at Zest, a Lima-based wealth technology company, the independence of the central bank for debt restructuring in formulating monetary and inflationary policy was behind Peru’s successes in maintaining monetary stability despite the flaws in the political scenario.
“As a result, inflation has remained within target since April and is the lowest in Latin America. Peru has also demonstrated its ability to maintain macroeconomic stability despite the political and social turmoil of the past few years.
Mineral wealth
Peru’s trade balance remains positive thanks to its mining exports and high mineral commodity prices, which enhances market liquidity, private sector credit, and confidence in the entire system, according to Kleinberg.
US Geological Survey data indicate that Peru possesses 12% of the world’s copper reserves, 3.9% of gold, 15.3% of silver, 9.5% of zinc, 5.3% of lead, and 2.8% of… tin in the world. Peru ranks as the world’s second-largest producer of copper, silver and zinc, as well as an important producer of gold, tin and molybdenum, and according to Peru’s Ministry of Energy and Mines (PMEM), the sector is responsible for 62% of the country’s exports and 9% of its GDP.
Among the biggest names exploring Peru’s mineral wealth are Grupo Perica, Antamina, Hochschild Mining, Cerro Verde, Minas Buena Ventura, Southern Copper, and Canada’s Barrick Gold. According to PMEM, this sector is expected to attract investments worth $5.1 billion by the end. For the year 2024, with a positive outlook for the next two years.
“Peru can be a very attractive market for foreign investors, due to its vast portfolio of natural resources, a historically stable macroeconomic environment, solid monetary policy, and a well-regulated banking system with a strong, independent central bank – all of which increase Peru’s attractiveness.” Investor Confidence, says Victor Oliveira, CFO for Peru and Bolivia at Havas Group, a French multinational advertising and public relations group affiliated with Vivendi.
“The country’s strategic location in northwestern South America bordering the Pacific Ocean makes it an excellent hub for facilitating trade with Asia and the United States, but this will still require huge investments in infrastructure,” he adds.
Peru’s Ministry of Economy and Finance estimates that the country will need to invest $150 billion, or 60% of its GDP, within the next five years in both approved projects and those awaiting approval.
“This includes construction, mining, modernization of electricity transmission networks, ports, and energy conversion projects – all of which are very attractive investment opportunities,” says Kleinberg.
Among Peru’s most impressive infrastructure projects is the massive new port of Chancay, which will increase the capacity of the country’s shipping units by 48%. Chinese conglomerate Cosco built the more than $3.6 billion facility, which opened on November 14.
“Once Chancay is (fully) operational, it will be the largest private port in the world, and will essentially serve as a hub for the Americas’ Pacific coast,” explains Lucas Baptista, Peru director at Brazilian Craft Group, a unit of LCL Logistics. Only 15% of its capacity to meet domestic needs in Peru.”
According to Baptista, Chancay will free up space in other ports, increasing Peru’s ability to export its own products. “Exports represent 23% of the country’s GDP and, besides minerals, include fruits, fishery products and textiles with important manufacturing centers for Lacoste and Tommy Hilfiger. “Improving infrastructure also means facilitating imports – including cars, rice and electronics,” he adds.
Havas’s Oliveira notes that Peru is also expanding and improving its digital infrastructure, which is crucial to its services market. “Tourism has huge potential and faces many bottlenecks that limit its growth potential. It is also the sector with the highest rate of informal employment. Banking is another sector with huge potential,” he adds.
“Financial inclusion is a big investment opportunity in Peru,” Kleinberg agrees. “Peru has a current banking level of 57%. This is lower than the 68% level recorded in countries with similar GDP per capita. There is real potential to bring 2.5 million adults into the banking system in this country.”
“FDI inflows rebounded in 2022, before declining in 2023 due to historically large protests,” Sinitsky says. With stability seemingly returning in 2024, the government estimates that inflows will be much stronger and reach record levels next year. We think their forecasts are reasonable because we also expect fairly strong growth and relative political stability next year.
However, with elections looming in 2026, overspending and political turmoil remain major threats.
“Peru’s political space is incredibly chaotic, with more than 30 political parties registered to run in the 2026 elections. However, the country’s institutions and central bank are concerned about international investment and have done a good job of protecting the property rights of foreign companies. We therefore expect that “Peru remains an attractive place to invest.”
