Written in conjunction with TMF Group
Though there have been plenty of tremors this year in the global economy, Peru has continued its run of impressive growth — particularly in comparison to some of its more sluggish Latin American neighbors.
Alonso Segura, the head of Peru's Ministry of Economy and Finance, said the country outranks comparable regional economies such as Chile, Colombia and Mexico.
This continued growth can be attributed in part to Peru's robust commodities sector. Domestic mining operations, which are important to the Peruvian economy, have been a significant factor in the country's sustained growth.
Additionally, Peruvian officials have expressed a desire to deepen reforms aimed at increasing productivity and reducing poverty.
Peru's efforts have drawn high marks from influential international observers. Alejandro Werner, an International Monetary Fund (IMF) director, recently called Peru's economy "internationally renowned."
Can Peru maintain its pace?
While there are many positive signs on the domestic front, Peru can't entirely escape the gravitational pull of the global economy. An economic slowdown has lowered demand for Peru's exports and reduced the amount of available investment capital.
Commodity prices have also tumbled, while external financial conditions have become less favorable. Many of Peru's commercial partners have experienced diminished growth. Projections for 2016 are promising, however, as new mining projects and other investments will stimulate domestic growth. The IMF has urged Peru to accelerate this growth by following a path of infrastructure investment and policy reform.
Investment potential
Peru has also been hailed as one of the best environments in which to pursue public-private partnership (PPP) investment opportunities. Peru, Brazil, Mexico, Colombia and Chile have all placed near the top of rankings calculated by the Inter-American Development Bank. These partnerships have become a popular mechanism for filling infrastructure gaps in developing areas.
Like any nation, Peru is facing a degree of uncertainty. Presidential elections are scheduled for next year, and there are questions regarding the exchange rate and other economic variables. Yet with one of the best growth rates in the area—and a legal framework that provides certainty—Peru is poised to draw continued interest from investors and businesses seeking to expand operations.
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