Peru Major Business Sectors Compiled by: Swiss Chamber of Commerce in Peru Lima, June 2013 Overview and trends In recent years, the Peruvian economy has experienced sustained growth, reflecting considerable economic and political strengthening within the region. In 2012, Peru s GDP increased by 6.3%, having defied the global economic crisis by registering an average growth of 5.7% in the period 2009-2012 Inflation has shown a downward trend over the last decade, placing it among the lowest and most stable in the region (Average of 3.7% in 2012). The high levels of public and private investment, the rise in exports and strong internal demand signal a bright outlook for the future of the Peruvian economy, setting the country as one with interesting commercial investment opportunities. Direct Foreign Investment has developed markedly over the last few years; the countries which invest most are Spain (21.25%), the United States (13.29%), South Africa (7.67%), Chile (7.25%) and Brazil (5.89%). 1 Together, these five countries accounted for over 50 per cent of investment in Peru in 2012 (22 billion USD). The sectors receiving most investment are mining, finance, communications, industry and energy, together making up 86.89%. The dynamics of Peruvian international trade over the last decade have been remarkable. Import and export volumes have grown considerably, largely due to new free trade agreements (FTA) with important commercial partners as the USA, Canada, China, Japan and the EU. Respective to the FTA with EFTA, the agreement has come into effect on July 1 st 2011. Sustained investment based on sound economic and political stability has also contributed to this favorable situation. In 2012, Peruvian exports totaled almost USD 46 billion, while imports exceeded USD 39 billion, representing an increase of over 11.61%. Accordingly, trade between Switzerland and Peru has increased significantly in recent years. Peruvian imports from Switzerland have grown by 30% since 2010, reaching 153 million USD in 2012. Imports of products like vitamins, electrical appliances, food processing machines, smart cards, watches and textile machines have shown an increase over 100% on this period. Peruvian exports to Switzerland rose by 32%, giving a total of 5 1 2012 - Proinversion 1/5
billion USD. This growing trend may be a effect of the FTA and a new interest of Peruvian companies on buying Swiss products GDP Sector Data A GDP growth of 6.3% was recorded in the non-primary sectors, primarily construction, other services and trade. The primary sectors show a different picture; while agriculture rose by 5.1%, fishing decreased by -11.9%, the mining sector posted a increased of 2.2%, the latter reflecting mainly the drop in international metal prices, as well as a decline in investment in that sector. Construction grew by 15.2%, boosted by a number of housing and infrastructure projects. The manufacturing sector recorded a 1.3% growth, driven by greater foreign and domestic demand. The trade sector rose by 6.7%, and the water and electrical sector rose by 5.2%. Lastly, confident consumer, driven by the growth, have also given a huge boost in term of growth of the internal market, although this has taken place also thank to largely available credit facilities. GDP 2012 Business Sector % of GDP Growth 2012/2011 Value in MM USD 2 Agriculture 7.24% 5.1% 6,546.75 Fishing 0.37% -11.9% 332.52 Mining 4.71% 2.2% 4,256.70 Manufacturing 14.16% 1.3% 12,797.85 Electricity and Water 2.00% 5.2% 1,803.89 Construction 7.03% 15.2% 6,353.51 Trade 15.32% 6.7% 13,844.38 Other services 39.79% 7.4% 35,909.02 Taxes and Rights to import 9.44% 6.6% 8,531.66 Global GDP 100.00% 6.3% 90,374.34 2 Average Exchange rate 2012: S/. 2.64 Source: BCRP 2/5
GDP Outlook The Peruvian government has forecast a GDP growth of 6.0% for 2013. In its Multi-annual Macroeconomic Framework for 2014-2016, the Ministry of Economy and Finance (MEF) predicts a 6,0%-6,5% average annual GDP increase during this period, while exports are anticipated to rise by 9% average annually. The Framework also points to expected rises in private and public investment of 10.00% and 13.00% respectively. External Trade Peru s total imports in 2012 reached 38.8 billion USD, translating as a rise of 23.87% on 2012. Growth was registered in every sector, according to SUNAT, Peru s national tax collection agency. Input materials continues to account for the largest share at 18.4 billion USD (+5.35%), followed by capital goods, which grew by 14.38% to 13.4 billion USD. In 2012, Peruvian exports rose 46.0 billion USD decreasing by -0.12%. Traditional products (-3.57%) continue to represent the greater part of Peruvian exports due to the inclusion of mining products (over 55% of all exports, with gold and copper alone amounting to almost 45% of all export) in this category. Exports of oil and oil byproducts grew by 6.17%, reaching 4.9 billion USD. The data shows that an increased in Non-traditional products such as non-metalic minerals (+46.82%), steel metallurgy (+15.35%) and metal-mechanical (+13.62%). Peru-EFTA Free Trade Agreement In 1996, Peru initiated negotiations with the European Free Trade Association (EFTA) member states with a view to the conclusion of a free trade agreement. This agreement entered into force in July 2011 for Switzerland and July 2012 for all EFTA-countries. Given the agreement s stated objective of promoting and creating conditions for the growth of trade and investment in goods and services, the prospects for companies representing both parties are likely to be boosted. It will also increase the supply of existing products. The agreement covers the following areas: Access to industrial and agricultural goods The application of sanitary and phytosanitary measures Regulations of origin Customs procedures and trade facilitation Competency policies Investments Government procurement Institutional affairs Dispute settlement 3/5
For Services, bilateral discussion EFTA - Perú started in April 2013 in view of achieving a comprehensive agreement as stated into the present Agreement (which so far covers only generalities of this chapter). Exports 2012 Business Sector % of Exports Growth 2012/2011 (%) Value FOB in MM USD 1. Traditional products 74.93-3.07 34,425.55 Mining 56.65-3.70 26,026.52 Fishing 5.03 10.12 2,311.91 Oil and by-products 10.87 6.17 4,995.38 Farming 2.38-35.16 1,091.74 2. Non-traditional; products 24.35 9.75 11,185.64 Farming 6.65 7.54 3,057.69 Textiles 4.73 9.16 2,173.59 Fishing 2.26-1.08 1,039.84 Chemicals 3.55-1.19 1,632.50 Metal-mechanical 1.19 13.62 547.62 Steel-metallurgy 2.64 15.35 1,212.80 Non-metalic minerals 1.57 46.82 721.66 Other (incl. jewellery) 1.74 27.13 799.95 3. Other 0.73 13.93 334.99 4. TOTAL EXPORTS 100.00-0.12% 45,946.18 Source: SUNAT 4/5
Imports 2012 Business Sector % of Imports Growth 2012/2011 (%) Value FOB in MM USD 1. Consumer Goods 19.96 23.87 7,945.90 Non-durables 9.99 18.01 3,975.92 Durables 9.97 30.35 3,969.98 2. Inputs 46.26 5.35 18,416.66 Fuel, lubricants and related 14.77 2.19 5,881.24 Raw Materials for agriculture 3.24 18.43 1,288.14 Raw Materials for industry 28.25 5.73 11,247.27 3. Capital Goods 33.74 14.38 13,432.03 Construction Materials 3.72 3.72 1,481.34 For agriculture 0.34 0.34 137.05 For industry 20.82 20.82 8,289.47 Transport equipment 8.85 8.85 3,524.17 4. Other Goods 0.04 0.04 14.33 5. TOTAL IMPORTS 100.0 11.61 39,808.91 Source: SUNAT Date: June, 2013 Author: Swiss Chamber of Commerce in Peru Address: Av. Salaverry 3240, Piso 4 Lima 27 Peru Tel.: 0051 1 264 35 16 Fax: 0051 1 264 35 26 info@swisschamperu.org 5/5