PERU: Booming economy with great social benefits
Peru, the third largest country in South America -after Brazil and Argentina-, has a population of 32 million people, 80% of it living in urban areas -10 million living in Lima alone- and almost 9 million are younger than 15 years.
The Peruvian economy grew from a GDP of US$ 58 billion 20 years ago to US$ 214 billion in 2017, multiplying its size by 3.7 times during this period. When converted to international dollars (PPP), its GDP per capita grew from less than US$ 5 thousand in 1997 to US$ 13 thousand last year, increasing almost 160%. This positive performance is instrumental in Peru’s fight against poverty. Since 2004, poverty rates dropped from 55% to 20.7%.
Favorable international commodity prices, the negotiation and signing of numerous free trade agreements, and a business environment that promotes private investment have contributed tremendously to this growth. In the mining sector alone, export revenues increased from US$ 2.7 to about US$ 26.8 billion. In addition, a successful export diversification policy has also contributed to the increase in our non-traditional exports, especially in the agricultural, fishing, manufacturing and textile sectors. Non-traditional exports are expected to reach US$ 11.4 billion, a notable increase from the US$ 2 billion.
The responsible macroeconomic policies implemented are reflected in a low and stable inflation rate of just 1.4% and a total external debt of 36% of GDP, being the external public debt just 10% of GDP. Peru’s outstanding performance is expected to continue in the years to come, with a forecasted annual growth rate of 4-5% from 2018 on.
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