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Peru Economy

    Economy—overview: The Peruvian economy has become increasingly market-oriented, with major privatizations completed since 1990 in the mining, electricity, and telecommunications industries. An austerity program implemented shortly after the FUJIMORI government took office in July 1990 contributed to a short-lived contraction of economic activity, but the slide came to a halt late that year, and in 1991 output rose 2.4%. By working with the IMF and World Bank on new financial conditions and arrangements, the government succeeded in ending its arrears by March 1993. In 1992, GDP fell by 2.8%, in part because a warmer-than-usual El Nino current resulted in a 30% drop in the fish catch, but the economy rebounded as strong foreign investment helped push growth to 7% in 1993, about 13% in 1994, and 6.8% in 1995. Growth slowed to 2.8% in 1996 as the government adopted tight fiscal and monetary policy to reduce the current account deficit and meet its IMF targets. Growth then rebounded to 7.3% in 1997 even as inflation fell to its lowest level in 23 years. Capital inflows surged to record levels in early 1997 and have remained strong. In 1998, El Nino's impact on agriculture, the financial crisis in Asia, and instability in Brazilian markets undercut growth. While Lima publicly projects a rebound to 5% in 1999, private sector analysts believe this figure is overly optimistic.

    GDP: purchasing power parity—$111.8 billion (1998 est.)

    GDP—real growth rate: 1.8% (1998 est.)

    GDP—per capita: purchasing power parity—$4,300 (1998 est.)

    GDP—composition by sector:
    agriculture: 7%
    industry: 37%
    services: 56% (1997)

    Population below poverty line: 54% (1991 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.9%
    highest 10%: 34.3% (1994)

    Inflation rate (consumer prices): 6.7% (1997 est.)

    Labor force: 7.6 million (1996 est.)

    Labor force—by occupation: agriculture, mining and quarrying, manufacturing, construction, transport, services

    Unemployment rate: 8.2%; extensive underemployment (1996)

    Budget:
    revenues: $8.5 billion
    expenditures: $9.3 billion, including capital expenditures of $2 billion (1996 est.)

    Industries: mining of metals, petroleum, fishing, textiles, clothing, food processing, cement, auto assembly, steel, shipbuilding, metal fabrication

    Industrial production growth rate: 1.2% (1996)

    Electricity—production: 16.211 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 19.25%
    hydro: 80.75%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 16.211 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: coffee, cotton, sugarcane, rice, wheat, potatoes, plantains, coca; poultry, beef, dairy products, wool; fish

    Exports: $6.8 billion (f.o.b., 1997)

    Exports—commodities: copper, zinc, fishmeal, crude petroleum and byproducts, lead, refined silver, coffee, cotton

    Exports—partners: US 20%, Japan 7%, UK 7%, China 7%, Germany 5% (1996)

    Imports: $10.3 billion (c.i.f., 1997)

    Imports—commodities: machinery, transport equipment, foodstuffs, petroleum, iron and steel, chemicals, pharmaceuticals

    Imports—partners: US 31%, Colombia 7%, Chile 6%, Venezuela 6%, UK 6% (1996)

    Debt—external: $25.7 billion (1996 est.)

    Economic aid—recipient: $895.1 million (1995)

    Currency: 1 nuevo sol (S/.) = 100 centimos

    Exchange rates: nuevo sol (S/.) per US$1—3.250 (January 1999), 2.930 (1998), 2.664 (1997), 2.453 (1996), 2.253 (1995), 2.195 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)