Peru

Economic Overview of Peru

GDP and Economic Growth:
• GDP (2024 estimate): $250 billion USD.
• Growth Rate: Peru’s economy is projected to grow at a rate of 2.8%-3.2% in 2024, driven by mining exports, public investment in infrastructure, and a gradual recovery in private consumption following the global economic slowdown.

Key Economic Features:
• Peru is one of the world’s top producers of copper, gold, and silver, with mining being the backbone of its economy.
• Agriculture and fisheries sectors contribute significantly to exports, with products like quinoa, coffee, and fishmeal being prominent.
• The government continues to prioritize trade liberalization and infrastructure development to attract foreign investment.

Key Sectors of the Peruvian Economy
1. Mining and Metals:
• Peru is the second-largest copper producer in the world and a key exporter of gold and silver.
• Significant investments in mining infrastructure are expected, especially in the Southern Copper Belt.
• Opportunities for UK exporters: advanced mining technology, sustainable practices, and safety equipment.
2. Agriculture:
• Peru exports high-value crops like avocados, asparagus, blueberries, and quinoa.
• Growing demand for agricultural technology and sustainable farming practices.
• Opportunities for UK exporters: irrigation systems, pest control solutions, and premium food products.
3. Infrastructure and Construction:
• The government has earmarked billions for infrastructure projects, including roads, ports, and railways.
• The expansion of Lima’s metro system and modernization of key airports are priority projects.
• Opportunities for UK exporters: engineering expertise, construction materials, and smart city solutions.
4. Tourism:
• Key attractions like Machu Picchu, the Amazon rainforest, and the Nazca Lines make tourism a vital sector.
• The government is investing in sustainable tourism initiatives.
• Opportunities for UK exporters: eco-tourism solutions, hospitality training, and heritage preservation technologies.
5. Energy and Renewables:
• Hydropower dominates Peru’s energy mix, but there is growing investment in solar and wind energy projects.
• Opportunities for UK exporters: renewable energy technology, consultancy services, and energy efficiency solutions.

Trade Environment

Main Export Partners:
• China, United States, Switzerland, Canada, South Korea.

Main Import Partners:
• China, United States, Brazil, Mexico, Chile.

Trade Policies:
• Peru has signed multiple Free Trade Agreements (FTAs), including with the UK under the UK-Andean Trade Agreement, ensuring tariff-free trade for most goods.
• Membership in the Pacific Alliance enhances trade with other Latin American nations.

Opportunities for UK Exporters to Peru
1. Mining Equipment and Services:
• UK expertise in sustainable mining practices, safety solutions, and advanced machinery is in demand.
• Challenges: Competition from established players like the US and China.
2. Agricultural Technology and Food Products:
• Strong demand for innovative farming technologies and premium, sustainably sourced food products.
• Challenges: Compliance with local regulations and competition from regional exporters.
3. Infrastructure and Smart Cities:
• Ongoing projects in urban development and transportation provide opportunities for UK firms.
• Challenges: Navigating complex procurement processes.
4. Healthcare and Pharmaceuticals:
• Peru’s healthcare system modernization presents opportunities in medical equipment, telemedicine, and pharmaceuticals.
• Challenges: Regulatory hurdles and competition from European and US suppliers.
5. Education and Training:
• Demand for English language training and vocational education in sectors like engineering and IT.
• Opportunities for partnerships with local universities and institutions.
6. Renewable Energy and Environmental Solutions:
• Opportunities to assist in Peru’s transition to green energy and address environmental challenges.
• Challenges: Navigating bureaucratic processes for project approvals.

UK-Peru Trade Relations

Trade Agreement:
• The UK-Andean Trade Agreement facilitates strong trade relations, providing duty-free access to many products.

UK Exports to Peru (2023):
• Machinery and mechanical appliances: £110 million.
• Vehicles: £40 million.
• Pharmaceuticals: £30 million.
• Alcoholic beverages: £25 million.

Investment Climate:
• Peru is a stable investment destination with pro-business policies.
• The mining, energy, and infrastructure sectors are particularly attractive for UK investors.

Market Entry Considerations

Challenges to Entry:
1. Bureaucracy: Complex regulatory frameworks can delay projects.
2. Logistics: Difficult terrain and underdeveloped transport networks pose challenges.
3. Cultural and Language Barriers: Fluency in Spanish is often essential for successful business relationships.

Recommendations for UK Exporters:
• Collaborate with local partners for market insights and regulatory compliance.
• Engage with organizations like the British-Peruvian Chamber of Commerce for networking opportunities.
• Leverage UK government resources such as the Department for Business and Trade (DBT).

Recent Political Developments
1. Economic Policy:
• The Peruvian government is focused on attracting foreign investment and addressing income inequality through social programs.
2. Social Challenges:
• Protests in rural areas related to environmental concerns and mining operations have prompted the government to promote dialogue between communities and companies.
3. Trade and Foreign Relations:
• Peru continues to strengthen ties with the Pacific Alliance, the UK, and China to boost trade and investment.

Contact Information

British Embassy in Lima
• Address: Av. José Larco 1301, Miraflores, Lima, Peru.
• Phone: +51 1 617 3000.
• Email: britishembassylima@fcdo.gov.uk.

British-Peruvian Chamber of Commerce
• Address: Av. Camino Real 456, San Isidro, Lima, Peru.
• Phone: +51 1 422 4444.
• Email: info@bpcc.org.pe.

Conclusion

Peru’s growing economy and commitment to infrastructure development make it a promising market for UK exporters. Opportunities abound in mining, renewable energy, and healthcare, while trade agreements like the UK-Andean Trade Agreement simplify market entry.

By building strong local partnerships and navigating regulatory challenges, UK businesses can unlock the vast potential of this dynamic Latin American market.