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Peru Peru

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Peru

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EconomicPoliticalStructural

Peru – Quick View
ECR score56.7 (Mar 2011)
ECR rank58 (Mar 2011)
Economic
GDP (2009)USD 63,358.76 million
GNI per capita PPP (2009)USD 8,120
FDI inflow (2009)USD 4,760 million
Inflation (2011e)2%
Central bank assets (2009)USD 35,184.01 million
Unemployment rate (2009)8.4%
Government deficit (2010)USD 166.79 million
Tax revenue (2011e)USD 23,485.82 million
Political
Government typeConstitutional Republic
Recent political crisisNA
Economic freedom score (2011)41st
Freedom of information score (2010)109th
Corruption perception index (2010)78th
Structural
Birth rate (2005-2010)21.3 per ‘000
Population balanceUnder 14 - 30.3%
Population balanceOver 60 females - 9.1%
Population balanceOver 60 males - 7.9%
Life expectancy years (2010)Males - 70.5 years
Life expectancy years (2010)Females - 75.9 years
Mortality rate (2005-2010)5.4 per ‘000
Literacy rate (2003-2008)91%
Internet access (2008)26.2%

[Top] Economic Overview

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[Top] Financial Indicators & Government Financial

Consumer price index

The consumer price index in December 2010 was registered at 102.2, an increase of 2% as compared to the last year. This increase in the index was a rise in prices of food and petroleum.

 

                                       Peru Consumer Price Index

                    

(Source: Central Bank)

 

Wholesale price index

 

Wholesale price index (WPI) declined to 1.76% in 2009 as compared to 8.91% in 2008.

 

                                                Peru Wholesale Price Index               

(Source: Central Bank)

 

Interest rate on savings deposits

 

The interest rate on savings deposits in 2010 Q3 was 0.6% for domestic currency and 0.3% for foreign currency as compared to 1.1% and 0.6% in 2009.

 

Year

Savings deposit rate (%)

Domestic currency

Foreign currency

2010 Q3

0.6

0.3

2010 Q2

0.6

0.4

2010 Q1

0.6

0.4

2009

1.1

0.6

2008

1.5

0.9

 

(Source: Central Bank)

 

Interest rate on Time deposits

 

Year

2008

2009

Rate on time deposits (%)

Interbank rate

6.5

1.2

Rate on deposits up to 30 days

6.5

1.2

181 day – 360 day term deposits

6.3

3.6

 

(Source: Central Bank)

 

Money supply (currency in circulation)

 

Money supply M3 and M2 in the third quarter of 2010 Q3 was PEN 122,810 million and PEN 74,491 million.

 

Money Supply (PEN million)

Year

2008

2009

Q1 2010

Q2 2010

Q3 2010

Currency

17,336

19,241

18,858

19,602

20,807

Broad money (M3)

92,848

106,334

113,282

116,414

122,810

Broad money in domestic currency (M2)

52,800

57,400

66,142

69,108

74,491

 

(Source: Central Bank)

 

Public debt

 

The total public debt for 2009 was USD 33,750 million corresponding to 26.5% of GDP. Public debt is estimated to be USD 35,238 million and USD 36,285 million in 2010 and 2011.

 

Year

2011E

2010E

2009

External public debt

21,621

20,460

20,600

Domestic public debt

14,664

14,779

13,149

Total public debt (USD million)

36,285

35,238

33,750

 

(Source: Ministry of Finance)

 

Government expenditure

 

The total non-financial expenditure amounted to PEN 74,706 million in 2009 corresponding to 19.6% of GDP. The total non-financial expenditure for 2010 is estimated to be PEN 84,272 million, an increase of 12.8% as compared to previous year. For 2011, total expenditure is estimated to be PEN 89,049 million.

 

General Government Expenditure (PEN million)

Year

Current Expenditure

Capital Expenditure

Total Non-Financial Expenditure

2009

52,882

21,825

74,706

2010E

56,717

27,554

84,272

2011E

59,344

29,705

89,049

 

 

 

 

 

 

 

 

 

 

 

(Source: Ministry of Finance)

 

Official exchange rate

 

The exchange rate of the country in January 2011 was registered at PEN 2.78 per dollar as compared to PEN 2.86 per dollar in January 2010.

 

                                                  Peru Exchange Rate

   (Source: Central Bank)

Government finances

 

Sovereign debt dynamics

 

Fiscal balance

 

The fiscal deficit in 2010 is estimated at PEN 478 million as compared to deficit of PEN 3,172 million in 2009.

 

Total revenue

 

The current revenue of the general government for 2009 was PEN 71,120 million corresponding to 18.6% of GDP. The major contribution i.e. 75.7% of revenues were collected from taxes, followed by 14.9% and 9.4% of revenues from others and contributions respectively.

 

General Government Revenue (PEN million)

 

2010

2009

Current Revenue

83,195

71,120

Tax Revenue

63,781

53,850

Contributions

6,976

6,659

Others

12,438

10,610

Capital Revenue

599

414

Total

83,794

71,534

 

(Source: Ministry of Finance)

 

The current revenue for 2010 is estimated to be PEN 83,195 million. General government revenue will increase by 16.9% in 2010. The current revenue as a percentage of GDP is estimated to be 19.8% in 2010.

 

(Source: Ministry of Finance)

 

Tax revenue

 

Central Government Tax Revenue (PEN million)

Year

2009

2010E

2011E

Income tax

20,346

25,601

26,340

Import duties

1,493

1,612

1,686

Value Added Tax

29,520

33,659

36,912

Excise Tax

4,145

4,714

5,333

Other tax revenue

4,448

4,516

4,901

Tax Refund

-7,341

-7,643

-7,864

Total Tax Revenue

52,611

62,460

67,307

 

(Source: Ministry of Finance)

 

The total tax revenue is estimated to be PEN 62,460 million and PEN 67,307 million in 2010 and 2011 respectively. The total tax revenue as a percentage of GDP is estimated to be 14.9% and 15% in 2010 and 2011.

                                                            Peru Tax Revenue

(Source: Central Bank, Ministry of Finance)

 

Current account balance

 

Peru is expected to register a current account deficit of USD 1,853 million in 2010, whereas in 2009 there was a surplus of USD 247 million. Current account balance as a percentage GDP is estimated to be -1.2% and -1.6% in 2010 and 2011.

 

(Source: Central Bank)

                                              Peru Current Account Balance

(Source: Central Bank pg 246, Ministry of Finance)

 

Balance of payments

 

 

Peru Balance of Payments (USD million)

Year

Trade in services

Trade in goods

Investment Income

Current transfers

Current balance

Financial account

2011E

-2,243

3,749

-7,161

3,129

-2,527

4,895

2010

-1,400

5,763

-9,173

2,957

-1,853

5,920

2009

-1,112

5,873

-7,371

2,856

247

1,012

2008

-1,962

3,090

-8,774

2,923

-4,723

8,674

2007

-1,191

8,287

-8,359

2,626

1,363

8,400

2006

-737

8,986

-7,562

2,185

2,872

348

2005

-834

5,286

-5,076

1,772

1,148

141


(Source: Central Bank, Ministry of Finance)

[Top] Labour Force and Employment Overview

Labour Force

 

The total labour force for the year 2009 was 4,514,000 individuals as compared to 4,410,000 in 2008.

 

(Source: Central Bank) 

 

Labour force participation rate

 

The labour force participation rate was registered at 68.4% in 2009 as compared to 68.1% in 2008.

 

(Source: Central Bank)

 

Unemployment Rate

 

The unemployment rate in the country was recorded at 8.4% in 2009. 379 thousands of individuals were unemployed in the same year.

 

(Source: Central Bank)

 

                                                                                      Peru Unemployment Rate

(Source: Central Bank)

 

 

The unemployment rate remained constant between the years 2007-2009. The unemployment rates in the first three quarters of 2010 were 9.2%, 7.6% and 7.6% respectively.

 

Of the total labour force, the number in employment was 4,135,000 in 2009.

 

Employed Labour Force (in thousands)

Year

2006

2007

2008

2009

Total

3,882

4,017

4,041

4,135

Manufacturing

670

688

674

661

Construction

208

249

262

260

Commerce

933

882

892

922

Services

2,018

2,132

2,152

2,237

Others

53

65

60

56

 

(Source: Central Bank)

 

Minimum wage

 

In 2007, the minimum real wage in the country was PEN 500.

 

(Source: ssa.gov)

 

Level of unionisation

 

In Peru, temporary and permanent workers have different trade unions. There are also restrictions on the migrant or foreign workers having membership in trade unions.

 

(Source: ITUC)

[Top] Political Stability

Government stability 

The government of the country is a constitutional republic. The President is the Head of State as well as the head of government. The executive powers are with the President. A cabinet consisting of 15 members and headed by the Prime Minister supports the president in matters related to policy-making.

The legislative powers are held by the parliament, known as Congress of the Republic. The parliament system is unicameral and comprises 120 members directly elected for a term of five years. The present composition of the parliament includes 33 women, representing less than 30% of the total members. The main functions of the legislative body include approval, amendment and repealing of laws and resolutions.

Peru has a history of coups, wherein the civilian government was overthrown by military generals. Military governments were established following coups in the years 1948, 1968 and 1975.

The political parties in the country include:

  • Alianza Popular Revolucionaria Americana (APRA)
  • Popular Christian Party (PCP)
  • Peruvian Nationalist Party (PNP)
  • Peru Posible (PP)
  • Popular Action (AP)
  • Union for Peru (UPP)
  • Somos Peru (SP)
  • National Restoration (RN)
  • National Solidarity (SN)

(Source: BBCIPUperu.gob)

Regulatory environment

Peru has constitutional republic form of government. The government consist of the executive, legislative and the judiciary branch. The executive and legislative powers are held by the President and the parliament respectively.               

 

 

 

The country’s economic freedom score is 68.6, making the economy 41st freest in the 2011 Index of Economic Freedom. Peru ranks 5thout of 29 countries in the South and Central American region.

(Source: heritage.org)

Corruption perception

Peru, with a score of 3.5, is placed at the 78th position on the Corruption Perceptions Index 2010. This indicates that the level of corruption in the country’s public sector is high.

(Source: transparency.org)

Freedom of Information

The government imposes restrictions on the media in the country.

World Press Freedom Index 2010 ranks Peru at 109th position with a score of 30. The country slipped from its 2009 position, when it was ranked 85th.

(Source: rsf.org)

Print media

El Comercio, Gestion, Ojo, El Bocon and La Republica are some of the important newspapers in the country.

(Source: BBC)

Judicial system

The judicial system in Peru is headed by the Supreme Court of justice. Other courts in the country include Superior Courts, Courts of First Instance and the Courts of Peace. The Executive Council is in charge of managing and administration of the judicial system along with the Plenary and the President of the Supreme Court. The Plenary, headed by the President of the Supreme Court and including all justices of the Supreme Court, discusses and examines the judiciary’s progress.

(Source: peru.gob)

[Top] Demographic Overview

Total Population 

The total population in the country for the year 2009 was 29.1 million, an increase of 1.04% as compared to previous year. The population in 2010 is estimated to be 29.5 million.

(Source: National Statistics,Central Bank)

Gender Balance

The total male population in 2009 was registered at 14.6 million, an increase of 1.4% over the previous year. The total female population was 14.5 million, an increase of 1.2% as compared to the last year. The representation of gender in the country is almost equal.

(Source: National Statistics)

 

(Source: National Statistics)

 

Birth and Death Rate

 

The infant mortality rate recorded in the period 2005-2010 was 21.2 deaths per 1,000 live births. The death rate was 5.4 deaths per 1,000 people and the birth rate was 21.3 births per 1,000 people.

(Source: destatis.de)

Average Life Expectancy

The average life expectancy at birth for an individual was 73.7 in 2010. The life expectancy for males and females was registered at 70.5 years and 75.9 years respectively. Life expectancy in the period 2015-2020 for males and females is projected to be 71.3 years and 76.4 years.

(Source: UNDPdestatis.deNational Statistics)

Racial/Ethnic environment

The ethnic group in Peru include European (15%), African, Japanese, Chinese & others (3%) and indigenous group (45%).

(Source: state.gov)

Migration and Urbanisation

The net migration in the period January-November 2010 was registered at 9,411,700 individuals. The urban and rural population in 2009 was 22.3 million and 6.8 million respectively. In future, rural population is estimated to decrease with the increase in urban population.

(Source: National StatisticsNS) 

Poverty and inequality

The national poverty rate in 2009 was 34.8% of the total population. The poverty rate has been on the decline since 2005, when it was recorded at 48.7% of the total population.

(Source: Ministry of Finance)

Human Development Index

The country is ranked 63rd on the Human Development Index 2010 with a score of 0.72. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

[Top] Soft Infrastructure

Education/literacy rate

 

The illiteracy rate was recorded at 7% in 2010. The illiteracy rate has decreased as compared to 8.4% in 2005 and is further projected to dip to 5.7% by 2015. The illiteracy rate for the year 2010 was registered at 3.5% for males and 10.3% for females. The Illiteracy rate is estimated at 2.9% for the year 2015.

 

(Source: National Statistics)

 

Year

Illiteracy Rate (%)

 

Male

Females

Total

2005

4.4

12.3

8.4

2010

3.5

10.3

7.0

2015

2.9

8.4

5.7

(Source: National Statistics)

 

Literacy rate in the period 2003-2008 was recorded at 91%.

 

(Source: UNICEF)

 

Education resources

 

The education system in the country consists of primary education, secondary education and higher education. It is compulsory for an individual in the country to complete primary education.

 

Net Rate of School Attendance for age group 3-16 (%)

Year

National

Urban

Rural

Male

Female

Male

Female

Male

Female

2005

85.8

84.8

88.0

88.0

81.9

78.7

2006

88.5

87.7

91.6

92.1

82.5

79.1

2007

89.1

88.7

91.3

91.6

84.8

82.9

2008

89.2

88.9

91.5

91.3

84.8

83.9

2009

89.8

89.3

91.9

91.5

85.5

84.7

(Source: National Statistics)

 

There were higher numbers of individuals in school from the urban areas as compared to the rural areas. The strength of students increased in schools over the past few years because of increase in number of educational institutions. The rate of attendance of students in schools in Q2 2010 was recorded at 93.4% and 88.4% in the urban and rural areas respectively.

 

Healthcare resources

 

The total number of hospitals and healthcare centres in 2009 were 155 and 1,321 respectively.

 

Population with chronic health problems (%)

Year

Urban Area

Rural Area

2005

21.5

17.1

2006

23.9

19.7

2007

24.6

17.4

2008

26.7

18.4

2009

28.1

19.5

 

The total numbers of individual suffering from chronic health problems in the year 2010 were 32.8% and 22.2% in the urban and rural areas respectively. According to the World Health Organisation (WHO), 23.8% of children under age group 5 were suffering from chronic malnutrition.

 

(Source: National Statistics, Ministry of Health)

[Top] Hard Infrastructure

Mass public transit

 

Public transport in the country is primarily dependent on buses, mini buses (micros) and cabs.

 

Roadways

 

The total length of roads in 2009 was 137,688 km as compared to 78,246 km in 2008.

 

(Source: National Statistics)

 

Ports

 

There are about 33 ports in and around Peru. Port of Callao and Port of Iquitos are the biggest ports in the country.

 

(Source: worldport)

 

Airports

 

There are 93 airports in the country.

 

Town

Airport Name

Runway length (ft.)

Andahuaylas

Andahuaylas

8,200

Anta

Comandante German Arias Grazzi

10,000

Arequipa

Rodriguez Ballon

9,700

Ayacucho

Col. Alfredo Mendivil Duarte

9,100

Chiclayo

Jose Abelardo Quinones Gonzales

8,200

Cuzco

Velazco Astete

11,100

Juliaca

Inca Manco Capac

13,700

Lima-Callao

Jorge Chavez Intl

11,500

Pisco

Pisco

9,900

Puerto Maldonado

Padre Aldamiz

11,400

Yauri Peru

Yauri

8,200

 

(Source: aircraftcharter)

 

 

Telecommunications networks

 

                                                                  Peru Internet Subscribers

There were 7,636,400 internet users in the country in the year 2008. The internet penetration rate was 26.2% in 2008.

 

(Source: internetworldstats)

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