An Introduction to the Peruvian Economy

Renzo Del Giudice (洛子謙)

Introduction

• I would like to introduce you one of the best performing economies in

Latin America: Peru.

• First, I will explain about the historical background and the modern

development of the Peruvian society.

• Afterwards, you will appreciate macroeconomic indicators, financial

statements and social economic challenges in Peru.

An Introduction to the Peruvian Economy - Renzo Del Giudice 2

Peru’s Map

An Introduction to the Peruvian Economy - Renzo Del Giudice 3

1. Historical Background

Ancient Peru: Cradle of many civilizations and Inca empire.

Under the Spanish empire rule, Peru was the politic and economical center of South America.

After the independence (1821), the Republic of Peru was involved in many wars, richness

periods and economical crisis.

An Introduction to the Peruvian Economy - Renzo Del Giudice 4

2. Modern Development of Peruvian Society

Nowadays, Peru have a multicultural population with a high human development index (0,741 – 2015).

In the last 30 years, Peru went from being a country merged in economic crisis to be the country with the most consistent rate of development in Latin America. (Focus Economics)

The country has strengthened its diplomatic, economic and cooperative relations with USA, Europe, and specially with Asia Pacific countries (specifically China).

An Introduction to the Peruvian Economy - Renzo Del Giudice 5

3. Macroeconomic Indicators (2015)

• Population : 31.9 million.

• GDP : USD 191 billion. (P: 8%, S: 38%, T: 54%)

• GDP Per Capita : USD 5,993

• Population Beyond Poverty Line : 17.8%

• Unemployment Rate : 6.5%

• Economic Growth : 3.3%

• External Debt (% of GDP) : 35.7

• Imports : USD 37.4 billion

• Exports : USD 34.2 billion

Source: Focus EconomicsAn Introduction to the Peruvian Economy - Renzo Del Giudice 6

3. Macroeconomic Indicators (2015)

Peruvian PBI Evolution

1998: Asian Financial Crisis and El Niño Event.2001: Private investment brought about by political instability.2009: International Financial Crisis.2014: Commodities Prices Fall.

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4. Financial Indicators (2015)

• Fiscal Balance (% of GDP) : -2.1

• Inflation (PPI annual variation in %) : 1.8

• Policy Interest Rate (%) : 3.75

• Stock Market (annual variation in %) : -33.4

• Exchange Rate (vs USD) : 3.41

• Current Account Balance (USD bn) : -8.4

• Current Account (% of GDP) : -4.4

• International Reserves : USD 61.5 million.

Source: Focus EconomicsAn Introduction to the Peruvian Economy - Renzo Del Giudice 8

4. Financial Indicators (2015)

Credit RatingStandard & Poor’s

A- (Domestic)

BBB+ (Foreigner)

A (T&C Assessment)

Outlook: Stable

Moody’s

A3

Outlook: Stable

Fitch

BBB+

Outlook: Positive

Source: Ministry of Economy (Peru)An Introduction to the Peruvian Economy - Renzo Del Giudice 9

4. Financial Indicators (2015)

Background

Founded in 1860, Lima Stock Exchange was in 2007, the most profitable stock exchange in the world.

Nowadays, it is integrated with Santiago, Mexico DF and Bogota Stock Exchanges.

Market Capitalization:

USD 409,363.53 million

Index:

IGVBL (General Index of Lima Stock Exchange)

ISVBL (Selective Index of Lima Stock Exchange)

Most Profitable Shares (2015)

Alicorp (26.32%), Hidrandina (21.73%), Backus & Johnson (13.31%), Sociedad Minera Corona (12.53%),

Minera Buenaventura (11.17%)

Lima Stock Exchange

Source: Bolsa de Valores de LimaAn Introduction to the Peruvian Economy - Renzo Del Giudice 10

5. Social Economical Challenges

Social Conflicts with Mining Activities

• Minery: aprox. 60% of Peruvian Exportations

• Currently conflicts: Conga, Tia Maria, Las Bambas

Narcotrafic

• 1st Cocaine Producer in the world

• Increased crime and money laudering

Economic Inequality

• Lima has high developed living standards, unlike inside the country

• It generates lower quality in education and basic services

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Thanks for your Attention!

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