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Apr 21, 2018

HERITAGE | PERÚ: Population, GDP, Inflation, Business, Trade, FDI, Corruption, and 201 Index of economic fredom

heritage.org

Population, GDP, Inflation, Business, Trade, FDI, Corruption


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Quick Facts
  • Population:
    • 31.5 million
  • GDP (PPP):
    • $406.2 billion
    • 3.3% growth
    • 4.3% 5-year compound annual growth
    • $12,903 per capita
  • Unemployment:
    • 4.9%
  • Inflation (CPI):
    • 3.6%
  • FDI Inflow:
    • $6.9 billion
Embed This Data
Peru’s economic freedom score is 68.7, making its economy the 43rd freest in the 2018 Index. Its overall score has decreased by 0.2 point, with slight declines in scores for fiscal health and government integrity outpacing an improvement in judicial effectiveness. Peru is ranked 7th among 32 countries in the Americas region, and its overall score is above the regional and world averages.
The current government is continuing its predecessor’s prudent, business-friendly policy framework and plans additional structural reforms to sustain Peru’s economic competitiveness. The initial focus is on formalizing the labor market, simplifying administrative procedures, and investing in infrastructure. Taxes for small businesses have been cut, and regulations have been changed to allow easier registration of companies in regional government offices. Government corruption remains a serious problem, limiting foreign investors’ confidence in the economy. State-owned enterprises remain very active, especially in the petroleum sector.

Background

Peru alternated between military rule and democracy in the last third of the 20th century. A violent multidecade guerilla insurgency was finally vanquished in the 1990s by the government of Alberto Fujimori, an authoritarian who nevertheless implemented a liberal economic reform agenda. Pedro Pablo Kuczynski, a center-right former World Bank economist, narrowly defeated a populist campaign by Fujimori’s daughter in the presidential election of 2016. Although thwarted at times by the opposition-dominated legislature, Kuczynski is pursuing a reform agenda. Significant foreign investment in mining and manufacturing has reduced the rates of poverty. Peru has entered into numerous free-trade agreements with the U.S. and other countries and is a founding member of the Pacific Alliance.

Rule of LawView Methodology

Although the government recognizes secured interests in property, both movable and immovable, enforcement of private property rights remains weak. The judicial system has a large backlog and is subject to political influence and corruption. Peruvians see corruption as pervasive in all branches of national, regional, and local governments, especially in the judicial, military, and prison systems.

Government SizeView Methodology

The top personal income tax rate is 30 percent. The top corporate tax rate is 28 percent. Other taxes include value-added and financial transactions taxes. The overall tax burden equals 15.9 percent of total domestic income. Over the past three years, government spending has amounted to 21.9 percent of total output (GDP), and budget deficits have averaged 1.6 percent of GDP. Public debt is equivalent to 24.8 percent of GDP.

Regulatory EfficiencyView Methodology

The process for starting a business can be lengthy and costly. Labor regulations lack flexibility, and the National Bureau for Statistics reports that 73.2 percent of the labor force is informal. Most price controls have been eliminated with the exception of the regulation of rates set by private companies in the telecommunications, energy and mining, public transport, and sanitation services sectors.

Open MarketsView Methodology

Trade is moderately important to Peru’s economy; the combined value of exports and imports equals 45 percent of GDP. The average applied tariff rate is 1.4 percent. Nontariff barriers impede some trade. In general, government policies do not significantly interfere with foreign investment. The financial sector has undergone gradual transformation. Credit to the private sector has increased, and foreign ownership in the financial sector is growing.

 20I8 INDEX OF ECONOMIC FREEDOM

rank country overall change
rank country overall change
7 Estonia 78.8 -0.3
21 Mauritius 75.1 +0.4
8 United Kingdom 78.0 +1.6
22 Malaysia 74.5 +0.7
9 Canada 77.7 -0.8
23 Norway 74.3 +0.3
10 United Arab Emirates 77.6 +0.7
24 Czech Republic 74.2 +0.9
11 Iceland 77.0 +2.6
25 Germany 74.2 +0.4
12 Denmark 76.6 +1.5
26 Finland 74.1 +0.1
13 Taiwan 76.6 +0.1
27 South Korea 73.8 -0.5
14 Luxembourg 76.4 +0.5
28 Latvia 73.6 -1.2
15 Sweden 76.3 +1.4
29 Qatar 72.6 -0.5
16 Georgia 76.2 +0.2
30 Japan 72.3 +2.7
17 Netherlands 76.2 +0.4
31 Israel 72.2 +2.5
18 United States 75.7 +0.6
32 Austria 71.8 -0.5
19 Lithuania 75.3 -0.5
33 Macedonia 71.3 +0.6
20 Chile 75.2 -1.3
34 Macau 70.9 +0.2

Moderately Free

rank country overall change
rank country overall change
35 Botswana 69.9 -0.2
66 Dominica 64.5 +0.8
36 Vanuatu 69.5 +2.1
67 Azerbaijan 64.3 +0.7
37 Romania 69.4 -0.3
68 Montenegro 64.3 +2.3
38 Uruguay 69.2 -0.5
69 Indonesia 64.2 +2.3
39 Rwanda 69.1 +1.5
70 Brunei Darussalam 64.2 -5.6
40 Jamaica 69.1 -0.4
71 France 63.9 +0.6
41 Kazakhstan 69.1 +0.1
72 Portugal 63.4 +0.8
42 Colombia 68.9 -0.8
73 Guatemala 63.4 +0.4
43 Peru 68.7 -0.2
74 The Bahamas 63.3 +2.2
44 Armenia 68.7 -1.6
75 El Salvador 63.2 -0.9
45 Poland 68.5 +0.2
76 Tonga 63.1 +0.1
46 Malta 68.5 +0.8
77 South Africa 63.0 +0.7
47 Bulgaria 68.3 +0.4
78 Kyrgyz Republic 62.8 +1.7
48 Cyprus 67.8 -0.1
79 Italy 62.5 0.0
49 Saint Vincent and the Grenadines 67.7 +2.5
80 Serbia 62.5 +3.6
50 Bahrain 67.7 -0.8
81 Kuwait 62.2 -2.9
51 Saint Lucia 67.6 +2.6
82 Paraguay 62.1 -0.3
52 Belgium 67.5 -0.3
83 Uganda 62.0 +1.1
53 Thailand 67.1 +0.9
84 Fiji 62.0 -1.4
54 Panama 67.0 +0.7
85 Côte d'Ivoire 62.0 -1.0
55 Hungary 66.7 +0.9
86 Morocco 61.9 +0.4
56 Kosovo 66.6 -1.3
87 Bhutan 61.8 +3.4
57 Costa Rica 65.6 +0.6
88 Seychelles 61.6 -0.2
58 Turkey 65.4 +0.2
89 Dominican Republic 61.6 -1.3
59 Slovakia 65.3 -0.4
90 Samoa 61.5 +3.1
60 Spain 65.1 +1.5
91 Bosnia and Herzegovina 61.4 +1.2
61 Philippines 65.0 -0.6
92 Croatia 61.0 +1.6
62 Jordan 64.9 -1.8
93 Oman 61.0 -1.1
63 Mexico 64.8 +1.2
94 Honduras 60.6 +1.8
64 Slovenia 64.8 +5.6
95 Burkina Faso 60.0 +0.4
65 Albania 64.5 +0.1
96 Cabo Verde 60.0 +3.1

Mostly Unfree

rank country overall change
rank country overall change
97 Tanzania 59.9 +1.3
129 Kenya 54.7 +1.2
98 Saudi Arabia 59.6 -4.8
130 India 54.5 +1.9
99 Tunisia 58.9 +3.2
131 Pakistan 54.4 +1.6
100 Nicaragua 58.9 -0.3
132 Zambia 54.3 -1.5
101 Cambodia 58.7 -0.8
133 Nepal 54.1 -1.0
102 Guyana 58.7 +0.2
134 Mauritania 54.0 -0.4
103 Namibia 58.5 -4.0
135 Burma 53.9 +1.4
104 Nigeria 58.5 +1.4
136 Lesotho 53.9 0.0
105 Moldova 58.4 +0.4
137 São Tomé and Príncipe 53.6 -1.8
106 Tajikistan 58.3 +0.1
138 Laos 53.6 -0.4
107 Russia 58.2 +1.1
139 Egypt 53.4 +0.8
108 Belarus 58.1 -0.5
140 Lebanon 53.2 -0.1
109 Gabon 58.0 -0.6
141 Vietnam 53.1 +0.7
110 China 57.8 +0.4
142 Ethiopia 52.8 +0.1
111 Sri Lanka 57.8 +0.4
143 Micronesia 52.3 -1.8
112 Trinidad and Tobago 57.7 -3.5
144 Argentina 52.3 +1.9
113 Mali 57.6 -1.0
145 The Gambia 52.3 -1.1
114 Solomon Islands 57.5 +2.5
146 Guinea 52.2 +4.6
115 Greece 57.3 +2.3
147 Democratic Republic of Congo 52.1 -4.3
116 Belize 57.1 -1.5
148 Malawi 52.0 -0.2
117 Barbados 57.0 +2.5
149 Cameroon 51.9 +0.1
118 Guinea-Bissau 56.9 +0.8
150 Ukraine 51.9 +3.8
119 Madagascar 56.8 -0.6
151 Sierra Leone 51.8 -0.8
120 Benin 56.7 -2.5
152 Uzbekistan 51.5 -0.8
121 Comoros 56.2 +0.4
153 Brazil 51.4 -1.5
122 Ghana 56.0 -0.2
154 Afghanistan 51.3 +2.4
123 Swaziland 55.9 -5.2
155 Maldives 51.1 +0.8
124 Haiti 55.8 +6.2
156 Iran 50.9 +0.4
125 Mongolia 55.7 +0.9
157 Burundi 50.9 -2.3
126 Senegal 55.7 -0.2
158 Liberia 50.9 +1.8
127 Papua New Guinea 55.7 +4.8
159 Kiribati 50.8 -0.1
128 Bangladesh 55.1 +0.1

Repressed

rank country overall change
rank country overall change
160 Niger 49.5 -1.3
171 Djibouti 45.1 -1.6
161 Sudan 49.4 +0.6
172 Algeria 44.7 -1.8
162 Chad 49.3 +0.3
173 Bolivia 44.1 -3.6
163 Central African Republic 49.2 -2.6
174 Zimbabwe 44.0 0.0
164 Angola 48.6 +0.1
175 Equatorial Guinea 42.0 -3.0
165 Ecuador 48.5 -0.8
176 Eritrea 41.7 -0.5
166 Suriname 48.1 +0.1
177 Republic of Congo 38.9 -1.1
167 Timor-Leste 48.1 +1.8
178 Cuba 31.9 -2.0
168 Togo 47.8 -5.4
179 Venezuela 25.2 -1.8
169 Turkmenistan 47.1 -0.3
180 North Korea 5.8 +0.9
170 Mozambique 46.3 -3.6

Not Ranked

rank country overall change
rank country overall change
N/A Iraq N/A N/A
N/A Somalia N/A N/A
N/A Libya N/A N/A
N/A Syria N/A N/A
N/A Liechtenstein N/A N/A
N/A Yemen N/A N/A



N/A Yemen N/A N/A