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Peru vs. Bolivia

Economy

PeruBolivia
Economy - overview

Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, and the dense forest of the Amazon. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and copper.

The Peruvian economy grew by an average of 5.6% per year from 2009-13 with a stable exchange rate and low inflation. This growth was due partly to high international prices for Peru's metals and minerals exports, which account for 55% of the country's total exports. Growth slipped from 2014 to 2017, due to weaker world prices for these resources. Despite Peru's strong macroeconomic performance, dependence on minerals and metals exports and imported foodstuffs makes the economy vulnerable to fluctuations in world prices.

Peru's rapid expansion coupled with cash transfers and other programs have helped to reduce the national poverty rate by over 35 percentage points since 2004, but inequality persists and continued to pose a challenge for the Ollanta HUMALA administration, which championed a policy of social inclusion and a more equitable distribution of income. Poor infrastructure hinders the spread of growth to Peru's non-coastal areas. The HUMALA administration passed several economic stimulus packages in 2014 to bolster growth, including reforms to environmental regulations in order to spur investment in Peru’s lucrative mining sector, a move that was opposed by some environmental groups. However, in 2015, mining investment fell as global commodity prices remained low and social conflicts plagued the sector.

Peru's free trade policy continued under the HUMALA administration; since 2006, Peru has signed trade deals with the US, Canada, Singapore, China, Korea, Mexico, Japan, the EU, the European Free Trade Association, Chile, Thailand, Costa Rica, Panama, Venezuela, Honduras, concluded negotiations with Guatemala and the Trans-Pacific Partnership, and begun trade talks with El Salvador, India, and Turkey. Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement of people. Since the US-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the US has doubled. President Pedro Pablo KUCZYNSKI succeeded HUMALA in July 2016 and is focusing on economic reforms and free market policies aimed at boosting investment in Peru. Mining output increased significantly in 2016-17, which helped Peru attain one of the highest GDP growth rates in Latin America, and Peru should maintain strong growth in 2018. However, economic performance was depressed by delays in infrastructure mega-projects and the start of a corruption scandal associated with a Brazilian firm. Massive flooding in early 2017 also was a drag on growth, offset somewhat by additional public spending aimed at recovery efforts.

Bolivia is a resource rich country with strong growth attributed to captive markets for natural gas exports – to Brazil and Argentina. However, the country remains one of the least developed countries in Latin America because of state-oriented policies that deter investment.

Following an economic crisis during the early 1980s, reforms in the 1990s spurred private investment, stimulated economic growth, and cut poverty rates. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large Northern Hemisphere markets. In 2005-06, the government passed hydrocarbon laws that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee; the laws engendered much public debate. High commodity prices between 2010 and 2014 sustained rapid growth and large trade surpluses with GDP growing 6.8% in 2013 and 5.4% in 2014. The global decline in oil prices that began in late 2014 exerted downward pressure on the price Bolivia receives for exported gas and resulted in lower GDP growth rates - 4.9% in 2015 and 4.3% in 2016 - and losses in government revenue as well as fiscal and trade deficits.

A lack of foreign investment in the key sectors of mining and hydrocarbons, along with conflict among social groups, pose challenges for the Bolivian economy. In 2015, President Evo MORALES expanded efforts to court international investment and boost Bolivia’s energy production capacity. MORALES passed an investment law and promised not to nationalize additional industries in an effort to improve the investment climate. In early 2016, the Government of Bolivia approved the 2016-2020 National Economic and Social Development Plan aimed at maintaining growth of 5% and reducing poverty.

GDP (purchasing power parity)$417.69 billion (2019 est.)

$408.898 billion (2018 est.)

$393.259 billion (2017 est.)

note: data are in 2010 dollars
$100.445 billion (2019 est.)

$98.267 billion (2018 est.)

$94.285 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate2.18% (2019 est.)

3.97% (2018 est.)

2.48% (2017 est.)
2.22% (2019 est.)

4.23% (2018 est.)

4.19% (2017 est.)
GDP - per capita (PPP)$12,848 (2019 est.)

$12,782 (2018 est.)

$12,507 (2017 est.)

note: data are in 2010 dollars
$8,724 (2019 est.)

$8,656 (2018 est.)

$8,424 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 7.6% (2017 est.)

industry: 32.7% (2017 est.)

services: 59.9% (2017 est.)
agriculture: 13.8% (2017 est.)

industry: 37.8% (2017 est.)

services: 48.2% (2017 est.)
Population below poverty line20.2% (2019 est.)37.2% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 1.4%

highest 10%: 36.1% (2010 est.)
lowest 10%: 0.9%

highest 10%: 36.1% (2014 est.)
Inflation rate (consumer prices)2.1% (2019 est.)

1.3% (2018 est.)

2.8% (2017 est.)

note: data are for metropolitan Lima, annual average
1.8% (2019 est.)

2.2% (2018 est.)

2.8% (2017 est.)
Labor force3.421 million (2020 est.)

note: individuals older than 14 years of age
5.719 million (2016 est.)
Labor force - by occupationagriculture: 25.8%

industry: 17.4%

services: 56.8% (2011)
agriculture: 29.4%

industry: 22%

services: 48.6% (2015 est.)
Unemployment rate6.58% (2019 est.)

6.73% (2018 est.)

note: data are for metropolitan Lima; widespread underemployment
4% (2017 est.)

4% (2016 est.)

note: data are for urban areas; widespread underemployment
Distribution of family income - Gini index42.8 (2018 est.)

51 (2005)
42.2 (2018 est.)

57.9 (1999)
Budgetrevenues: 58.06 billion (2017 est.)

expenditures: 64.81 billion (2017 est.)
revenues: 15.09 billion (2017 est.)

expenditures: 18.02 billion (2017 est.)
Industriesmining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing, cement, glass, textiles, clothing, food processing, beer, soft drinks, rubber, machinery, electrical machinery, chemicals, furnituremining, smelting, electricity, petroleum, food and beverages, handicrafts, clothing, jewelry
Industrial production growth rate2.7% (2017 est.)2.2% (2017 est.)
Agriculture - productssugar cane, potatoes, rice, plantains, milk, poultry, maize, cassava, oil palm fruit, grapessugar cane, soybeans, potatoes, maize, sorghum, rice, milk, plantains, poultry, bananas
Exports$55.583 billion (2019 est.)

$55.129 billion (2018 est.)

$53.823 billion (2017 est.)
$9.632 billion (2019 est.)

$9.81 billion (2018 est.)

$9.326 billion (2017 est.)
Exports - commoditiescopper, gold, refined petroleum, zinc, fishmeal, tropical fruits, lead, iron, molybdenum (2019)natural gas, gold, zinc, soybean oil and soy products, tin, silver, lead (2019)
Exports - partnersChina 29%, United States 12%, Canada 5%, South Korea 5%, Switzerland 5% (2019)Argentina 16%, Brazil 15%, United Arab Emirates 12%, India 10%, United States 6%, South Korea 5%, Peru 5%, Colombia 5% (2019)
Imports$48.211 billion (2019 est.)

$47.616 billion (2018 est.)

$46.15 billion (2017 est.)
$10.142 billion (2019 est.)

$9.99 billion (2018 est.)

$9.8 billion (2017 est.)
Imports - commoditiesrefined petroleum, crude petroleum, cars, broadcasting equipment, delivery trucks (2019)cars, refined petroleum, delivery trucks, iron, buses (2019)
Imports - partnersChina 24%, United States 22%, Brazil 6% (2019)Brazil 22%, Chile 15%, China 13%, Peru 11%, Argentina 8%, United States 7% (2017)
Debt - external$81.333 billion (2019 est.)

$75.467 billion (2018 est.)
$12.81 billion (31 December 2017 est.)

$7.268 billion (31 December 2016 est.)
Exchange ratesnuevo sol (PEN) per US dollar -

3.599 (2020 est.)

3.3799 (2019 est.)

3.366 (2018 est.)

3.185 (2014 est.)

2.8383 (2013 est.)
bolivianos (BOB) per US dollar -

6.91 (2020 est.)

6.91 (2019 est.)

6.91 (2018 est.)

6.91 (2014 est.)

6.91 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt25.4% of GDP (2017 est.)

24.5% of GDP (2016 est.)

note: data cover general government debt, and includes debt instruments issued by government entities other than the treasury; the data exclude treasury debt held by foreign entities; the data include debt issued by subnational entities
49% of GDP (2017 est.)

44.9% of GDP (2016 est.)

note: data cover general government debt and includes debt instruments issued by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities
Reserves of foreign exchange and gold$63.83 billion (31 December 2017 est.)

$61.81 billion (31 December 2016 est.)
$10.26 billion (31 December 2017 est.)

$10.08 billion (31 December 2016 est.)
Current Account Balance-$3.531 billion (2019 est.)

-$3.821 billion (2018 est.)
-$2.375 billion (2017 est.)

-$1.932 billion (2016 est.)
GDP (official exchange rate)$230.707 billion (2019 est.)$40.822 billion (2019 est.)
Taxes and other revenues27.1% (of GDP) (2017 est.)39.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.1% (of GDP) (2017 est.)-7.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 7.3%

male: 6.9%

female: 7.9% (2019 est.)
total: 8.8%

male: 8.2%

female: 9.7% (2019 est.)
GDP - composition, by end usehousehold consumption: 64.9% (2017 est.)

government consumption: 11.7% (2017 est.)

investment in fixed capital: 21.7% (2017 est.)

investment in inventories: -0.2% (2017 est.)

exports of goods and services: 24% (2017 est.)

imports of goods and services: -22% (2017 est.)
household consumption: 67.7% (2017 est.)

government consumption: 17% (2017 est.)

investment in fixed capital: 21.3% (2017 est.)

investment in inventories: 3.8% (2017 est.)

exports of goods and services: 21.7% (2017 est.)

imports of goods and services: -31.3% (2017 est.)
Gross national saving19.8% of GDP (2018 est.)

19.7% of GDP (2017 est.)

19% of GDP (2015 est.)
14.2% of GDP (2019 est.)

16.1% of GDP (2018 est.)

16.1% of GDP (2017 est.)

Source: CIA Factbook