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Peru vs. Chile

Economy

PeruChile
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.

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some 60% of total exports. Copper is Chile’s top export and provides 20% of government revenue.

From 2003 through 2013, real growth averaged almost 5% per year, despite a slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to an estimated 1.4% in 2017. A continued drop in copper prices prompted Chile to experience its third consecutive year of slow growth.

Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, effective 1 January 2004. Chile has 26 trade agreements covering 60 countries including agreements with the EU, Mercosur, China, India, South Korea, and Mexico. In May 2010, Chile signed the OECD Convention, becoming the first South American country to join the OECD. In October 2015, Chile signed the Trans-Pacific Partnership trade agreement, which was finalized as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and signed at a ceremony in Chile in March 2018.

The Chilean Government has generally followed a countercyclical fiscal policy, under which it accumulates surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allows deficit spending only during periods of low copper prices and growth. As of 31 October 2016, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $23.5 billion. Chile used these funds to finance fiscal stimulus packages during the 2009 economic downturn.

In 2014, then-President Michelle BACHELET introduced tax reforms aimed at delivering her campaign promise to fight inequality and to provide access to education and health care. The reforms are expected to generate additional tax revenues equal to 3% of Chile’s GDP, mostly by increasing corporate tax rates to OECD averages.

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
$459.134 billion (2019 est.)

$454.344 billion (2018 est.)

$437.082 billion (2017 est.)

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

3.97% (2018 est.)

2.48% (2017 est.)
1.03% (2019 est.)

4% (2018 est.)

1.41% (2017 est.)
GDP - per capita (PPP)$12,848 (2019 est.)

$12,782 (2018 est.)

$12,507 (2017 est.)

note: data are in 2010 dollars
$24,226 (2019 est.)

$24,259 (2018 est.)

$23,664 (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: 4.2% (2017 est.)

industry: 32.8% (2017 est.)

services: 63% (2017 est.)
Population below poverty line20.2% (2019 est.)8.6% (2017 est.)
Household income or consumption by percentage sharelowest 10%: 1.4%

highest 10%: 36.1% (2010 est.)
lowest 10%: 1.7%

highest 10%: 41.5% (2013 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
2.2% (2019 est.)

2.7% (2018 est.)

2.1% (2017 est.)
Labor force3.421 million (2020 est.)

note: individuals older than 14 years of age
7.249 million (2020 est.)
Labor force - by occupationagriculture: 25.8%

industry: 17.4%

services: 56.8% (2011)
agriculture: 9.2%

industry: 23.7%

services: 67.1% (2013)
Unemployment rate6.58% (2019 est.)

6.73% (2018 est.)

note: data are for metropolitan Lima; widespread underemployment
7.22% (2019 est.)

7.33% (2018 est.)
Distribution of family income - Gini index42.8 (2018 est.)

51 (2005)
44.4 (2017 est.)

57.1 (2000)
Budgetrevenues: 58.06 billion (2017 est.)

expenditures: 64.81 billion (2017 est.)
revenues: 57.75 billion (2017 est.)

expenditures: 65.38 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, furniturecopper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles
Industrial production growth rate2.7% (2017 est.)-0.4% (2017 est.)
Agriculture - productssugar cane, potatoes, rice, plantains, milk, poultry, maize, cassava, oil palm fruit, grapesgrapes, apples, wheat, sugar beet, milk, potatoes, tomatoes, maize, poultry, pork
Exports$55.583 billion (2019 est.)

$55.129 billion (2018 est.)

$53.823 billion (2017 est.)
$90.626 billion (2019 est.)

$92.772 billion (2018 est.)

$88.376 billion (2017 est.)
Exports - commoditiescopper, gold, refined petroleum, zinc, fishmeal, tropical fruits, lead, iron, molybdenum (2019)copper, wood pulp, fish fillets, pitted fruits, wine (2019)
Exports - partnersChina 29%, United States 12%, Canada 5%, South Korea 5%, Switzerland 5% (2019)China 32%, United States 14%, Japan 9%, South Korea 7% (2019)
Imports$48.211 billion (2019 est.)

$47.616 billion (2018 est.)

$46.15 billion (2017 est.)
$87.505 billion (2019 est.)

$89.578 billion (2018 est.)

$83.01 billion (2017 est.)
Imports - commoditiesrefined petroleum, crude petroleum, cars, broadcasting equipment, delivery trucks (2019)refined petroleum, crude petroleum, cars, broadcasting equipment, delivery trucks (2019)
Imports - partnersChina 24%, United States 22%, Brazil 6% (2019)China 24%, United States 20%, Brazil 8%, Germany 5%, Argentina 5% (2019)
Debt - external$81.333 billion (2019 est.)

$75.467 billion (2018 est.)
$193.298 billion (2019 est.)

$181.089 billion (2018 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.)
Chilean pesos (CLP) per US dollar -

738.81 (2020 est.)

770.705 (2019 est.)

674.25 (2018 est.)

658.93 (2014 est.)

570.37 (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
23.6% of GDP (2017 est.)

21% of GDP (2016 est.)
Reserves of foreign exchange and gold$63.83 billion (31 December 2017 est.)

$61.81 billion (31 December 2016 est.)
$38.98 billion (31 December 2017 est.)

$40.49 billion (31 December 2016 est.)
Current Account Balance-$3.531 billion (2019 est.)

-$3.821 billion (2018 est.)
-$10.933 billion (2019 est.)

-$10.601 billion (2018 est.)
GDP (official exchange rate)$230.707 billion (2019 est.)$282.655 billion (2019 est.)
Taxes and other revenues27.1% (of GDP) (2017 est.)20.8% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.1% (of GDP) (2017 est.)-2.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 7.3%

male: 6.9%

female: 7.9% (2019 est.)
total: 19.6%

male: 19.1%

female: 20.3% (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: 62.3% (2017 est.)

government consumption: 14% (2017 est.)

investment in fixed capital: 21.5% (2017 est.)

investment in inventories: 0.5% (2017 est.)

exports of goods and services: 28.7% (2017 est.)

imports of goods and services: -27% (2017 est.)
Gross national saving19.8% of GDP (2018 est.)

19.7% of GDP (2017 est.)

19% of GDP (2015 est.)
18.9% of GDP (2019 est.)

18.6% of GDP (2018 est.)

18.9% of GDP (2017 est.)

Source: CIA Factbook