Peru: Booming Economy Fueled by its Exports
In 2018, Peru’s economic activity grew 4% and is expected to continue growing on average at the same pace for the coming years. In comparison, Latin America’s growth is forecast at 1.3% in 2019 and 2.4% in 2020.
As a result, thePeruvian economy grew from a GDP of US$ 54.3 billion 20 years ago to more than US$ 225 billion in 2018. An increase of 4 times in the last two decades. Favorable international commodity prices, the negotiation and signing of numerous free trade agreements and a business environment that promotes private investment, have greatly contributed to this growth, as have the country’s prudent long time monetary and fiscal policies. Responsible macroeconomic policies can be seen in the low and stable inflation rate, which was just 2.2% in 2018.
In the mining sector alone, export revenues increased from US$ 2.7 billion to about US$ 29 billion over the last 20 years. In addition, a successful export diversification policy has also contributed to the increase in Peru’s non-traditional exports, especially in the agricultural, fishing, manufacturing and textile sectors. Non-traditional exports reached US$ 13.2 billion in 2018, a notable increase from the US$ 2 billion in 1998. The overall exports from Peru totaled US$ 49.1 billion in 2018, compared with imports which reached US$ 41.9 billion, generating again an important trade surplus.
With the US, Peru has a commercial deficit, meaning that the products that it exports to the US are less than what Peru buys. Though the US is the key market for many non-traditional Peruvian products, some hitting a percentage as high as 60%.
Exports of food from Peru to the world have been booming, particularly in the northern winter, with grapes reaching US$ 812 million, avocado US$ 724 million, blueberries US$ 548 million, asparagus US$ 481 million and mangoes over US$ 300 million, in 2018. This group of products has grown 70% in the last 4 years. Other SuperFoods Peru include specialty coffee, fine cacaos, seafood, quinoa, peppers, artichoke, citrus, to name only a few, totaling US$ 9 billion last year in this category of food.
Additionally, Peru is a dynamic tourism and investment destination, having been named the Best Culinary Destination from the prestigious World Travel Awards for seven consecutive years. Tourists visiting Peru reached 4.4 million in 2018, a rise of 10% from 2017.
Peru is the third largest country in South America, after Brazil and Argentina, and has a population of over 32 million people, 78% of whom are living in urban areas with 10 million living in the capital city of Lima alone. Nominal GDP per capita in Peru has tripled in the last 20 years. This positive performance is instrumental in Peru’s fight against poverty. Since 1998, poverty rates dropped from 42.4% of the population to the current 21.7%.
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