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Briefing

Peru: Economic Profile

Appears in: Latin America, Macroeconomy, Peru, Growth Outlook and Business Cycle

Critical Issues

Background:

The Peruvian economy has been one of the top performers in Latin America during the past decade, especially as it benefited from the high prices for its commodities exports and increasing domestic consumer demand. While the country suffered from the global financial crisis that hit  in 2009—with GDP groth dropping from 8.9% in 2008 to 0.9% in 2009—the recovery has been strong, with the economy registering impressive growth rates that are expected to continue to grow above potential. Peru’s central bank expects the economy to expand by more than 8% in 2010. Part of this is due to the strong fiscal and monetary stimulus, as well as the streamlining of business formation procedures, more flexible labor regulations and a reduction in the tariff barrier. It is expected that Peruvian growth will slow down as base effects subside, monetary and fiscal stimulus are withdrawn and external conditions become less favorable.

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