Peru 

Peru country policy

Policy established 20 December 2007

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1500 mln euro
• Early warning signal 1150 mln euro
• - of which was used as at 2011-12-31 8 mln euro

Country class: 3

Peru country facts

Atradius Dutch State Business Economic Research
Country Report last updated 15 March 2011
Country PERU 

Political Situation
Rather Stable

Head of state
President Alan Garcia.

Form of government
Minority government of Alianza Popular Revolucionaria Americana (APRA).

Internal Economic Situation
Strong Economic Upswing

General situation
After a dip in 2009 (real GDP-growth only 0.9%) the domestic economy resumed its high growth rate in 2010 (8.7%) with signs of overheating. Both domestic demand and exports are underpinning the upswing as high mineral prices foster investments and household spending. Surging private investments are linked to an ongoing boom in construction, industrial production and mining projects. Exports are also supported by free trade agreement with US and China. Inflation will rise to 2.2% in 2011 but remain within the BCRP-target range. Peru’s small but well-capitalised and supervised financial sector is strongly dollarised, leaving it exposed to a potentially high currency risk. NPL-ratio one of LA’s lowest. Rather poor corruption index: 78th  of 178. 
 
External Economic Situation :   Good

Main sources of foreign exchange
Minerals: >60%, of which copper (28%) and gold (24%); natural gas/oil, coffee, textiles; workers’ transfers; tourism.

Main foreign markets
USA (15%), China (14%), Canada (10%).

Main expenses of foreign exchange
Intermediate goods (53%), capital goods (25%).

Balance of payment
High prices/risen exportvolume of minerals and buoyant non-traditionals have resulted in strong trade accounts, leaving the current account with only small deficits. Taking into account the large inflow of long term capital (FDI in mining), the resulting net positive total account leads to an accumulation of foreign reserves and an appreciating trend of the nuevo sol since 2009.