Economy of Peru

Peru’s economy in recent years has been shaky at best. Peru has had to deal with challenges such as hyperinflation and unreported revenue from illegal industries. Despite these challenges, Peru has seen moderate economic growth in the last couple of years and tourism has grown substantially to play a major role in the Peru’s economy.

Important Cities

Lima is Peru’s capital and is the largest metropolitan city with almost 8 million people. Lima is also the most important port and business center of Peru. Other important cities include Cusco and Arequipa in the Andes region, Trujillo, Chiclayo and Piura along the coast, and Iquitos in the jungle.

Economic Sectors

Thanks to foreign investment and the cooperation between the government and the IMF and World Bank, growth was strong in 1994-97 and inflation was brought under control. In 1998, El Nino's impact on agriculture, the financial crisis in Asia, and instability in Brazilian markets undercut growth. The following year was again a bad year for Peru, with the aftermath of El Nino and the Asian financial crisis working its way through the economy. Political instability resulting from the presidential election and the president’s subsequent departure from office limited growth in 2000.

The downturn in the global economy further curtailed growth in 2001. President Toledo, who assumed the presidency in July 2001, has been working to reinvigorate the economy and reduce unemployment. Economic growth in 2002 is estimated at 4.8%, led by construction in the retail and gas sectors.

Major exports include copper (23.1% of total value of exported goods), fish products (15.4%), agricultural products (11%), zinc (9.6%), gold (5.6%) and petroleum products (6%). Peru’s major trading partners are the United States and Japan.