07-09-12 by Emmanuel Besserve
Peru's economy has had some strong growth over the last 7 years through 2010 and averaged a growth of about 7% a year. Most of this growth resulted in the market orientated economic reforms that have helped promote trade and attract investments. There was also a lot of privatization in the 1990s that were helped by the high prices for Peru’s largest commodity exports. The real GDP actually grew by about 9% over the past 3 years.
With economic expansion, in recent years, it has been driven by the construction industry, the private investment firms, and the domestic consumption. With Peru's economy, it is highly managed and there is tax collection that has increased the revenues so that expenditures are keeping pace. With private investment, it is actually rising and it is becoming more broad-based, Peru even obtained the investment grade status in 2008. President Ollanta Humala appointed an economic team and took a lot of action the first 100 days in office. He will continue to keep the sound economic policies of the prior administrations. With a well-functioning economic engine that came from the predecessors, the administrations are pursuing with a social inclusion agenda and have a goal help the lower classes increase in economic success.
Peru did well with the 2008 global financial crisis and this was one of the few countries in Latin America that had that positive growth rate in 2009. The annual inflation rate actually decreased throughout the years because of the significant increase in global oil and food prices. With the pre-payments and the lessened borrowing, the external debt for the public dropped by about 13% of the GDP. The foreign reserves were at an extreme high at the end of 2010 and followed through 2011.
Peru and the US signed a trade agreement in April of 2006 in Washington DC. This trade agreement was ratified in June of 2006 and by the US Congress in December of 2007. The Peruvian government has worked really hard to pass changes to help with environmental and intellectual property laws so that the agreement could go into force. Peru's major trading partners today are the US, China, the EU, Switzerland, Canada, and Japan. US government statistics show that the US has had three years of trade surpluses with Peru. This is something that is really important and these statistics show that people are moving forward in Peru and are working hard to get the trade that they need and want so that they are getting the best choices that are out there.
Peru exports many things such as gold, copper, crude oil, petroleum products, coffee, asparagus, apparel, and many others. The imports that they have include chemicals, machinery, computer products, electrical machinery, plastics, vehicles, steel, and cereals. Peru is part of the Andean community with the APEC forum and is also part of the WTO. Peru has trade agreements in place with Mexico, Chile, Canada, Singapore, China, the EU, South Korea, and the EFTA. They are also working on a trade agreement with the Trans-Pacific Partnership, this partnership will be with the United States and will make a significant impact on trading for them along with most of the other partnerships that they have made over the last few years in an attempt to stabilize their economy and to grow.
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