Economy of Peru

Overview

The economy of Peru has undergone extensive free market reforms since the year 1990. Major privatization in the mining, electricity and telecommunications industries as well as legalizing certain areas of the informal sector was accomplished. With the aid of foreign investment and the cooperation between the Fujimori government and the IMF and World Bank, the economy of Peru improved considerably. The growth rate of the Peruvian economy was more than 4% per year in 2002-2006, with a stable exchange rate. The inflation rate was also brought under control.

Peru's GDP per capita income in the year 2006 was $6,400 with a growth rate of 6.5%. Economic growth in Peru continues to be driven by exports of textiles, minerals, and agricultural products. In spite of the strong macroeconomic performance, poverty and unemployment in Peru remains persistently high.

Major Economic Sectors

The services sector in the economy of Peru has a bigger share in the total GDP and account for 65% of GDP, followed by industries sector including mining, accounts for 26% and agriculture for 9%.

The important industries in Peru are steel, textiles, cement, petroleum, and clothing. The most important agricultural products in Peru are fish, rice, diary, wheat, cotton, and potatoes.

There has been a significant development in mining and industry sector over the past decades but the development of agriculture, particularly for the domestic market, has been slow.

Foreign Trade

Peru has experienced both trade surplus and also balance of payment surplus in recent years. The mining and fisheries production are the two main traditional export categories. Due to a high volume of growth, mainly gold and copper, mining's share of exports has augmented in recent years while exports of agricultural and fisheries products have fallen.

Peru's other export items are copper, manufacturing, lead, coffee, sugar and cotton and depends on the countries such as US, Germany, Switzerland and Brazil for exporting its products.

Major importable items of Peru are petroleum, iron and steel, and food items. And the country's important import partners are Brazil, Chile and US.

 

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