Republic of Peru

1

• Republic of Peru
• Republica del Peru
• Capital Lima
• By Nitish Rajbhandary

2
General Information

• Government Constitutional Republic
• President Alan Garcia Perez
• Climate Arid and mild in coastal area, temperate
  to frigid in the Andes, and warm and humid in the
  jungle onwards.
• Natural Resources Iron ore, copper, gold,
  silver, zinc, lead, fish, petroleum, natural gas,
  and forestry.
• Currency Peruvian Nuevo Sol (PEN)
• Exports Gold, copper, fishmeal, petroleum, zinc,
  textiles, apparel, asparagus and coffee.
• Major Markets U.S., China, Chile, Canada,
  Switzerland, Japan, Spain, Netherlands.
• Imports Machinery, vehicles, processed food,
  petroleum, steel.
• Major Suppliers U.S., China, Brazil, Ecuador,
  Colombia.

3
Characteristics

• Country Area 1,285,220 sq km (3rd largest in
  Latin America)
• Population 28,674,757 (July 2007 est.) (5th most
  populous in the region)
• Population Density 22/sq. km
• Population Growth 1.289
• Net Migration Rate -0.99 migrant(s)/1000
  population
• Life expectancy Total 70.14 / Male 68.33 /Female
  72.04
• Ethnic groups Amerindian 45, mestizo 37 ,
  white 15, black, Japanese, Chinese, and other 3
• Religions Roman Catholic 81,Seventh Day
  Adventist 1.4, other Christian 0.7, other 0.6,
  unspecified or none 16.3

4
Economy

• GDP (PPP) 181.8 billion
• GDP (official exchange rate) 76.09 billion
• GDP (per capita) 6,400 (half of Chile)
• GDP Growth Rate 6.5/ ( 2002 2006 ) 5.7
• GDP (by sector) agriculture 8.5 industry
  26.4 services 65
• Inflation Rate 2.1 / (2002 06) 1.9
• Unemployment Rate 7.2
• Government Budget revenues 25.5 billion
  expenditures 25.18 billion including capital
  expenditures of 1.8 billion
• Debt 33.8 of GDP
• Current Account Balance 1.515 billion
• FDI inflows ( of GDP) 2.8

5
Fiscal Policy

• Current Account balance 02 (-1,150 m), 03
  (-958 m), 04 (19.3m), 05 (1,105 m), 06
  (2,456 m)
• Very low tax base hence low flexibility.
• Aims towards increasing tax up to 17 of GDP from
  current 15 by eliminating tax exemptions and
  altering tax code.
• Tax code will be pro- contributor and
  pro-investor.
• Cutting tariffs to encourage competition.
• Increase quality of public spending by
  simplifying programs.

6
Monetary Policy Exchange Rate

• Compared to other Latin countries, subdued
  inflation at an average of 2. Main worry with
  real GDP rising.
• Diversifying economy and falling debt levels.
• Interest rates might increase by 25 basis points
  to 4.75 from 4.5 last year.
• Rapid growth in spending with concentration on
  dollar lending a cause for long-term concern
  hence reserve requirement of 30 for dollars as
  compared to 6 for sol.
• Exchange rate system is free-floating since the
  90s.
• Sol expected to depreciate by 1.5 next year.

7
Social Policies

• Suffrage 18 years universal and compulsory
  until the age of 70.
• Big emphasis on education. Over 30,000 schools
  throughout the country.
• Rising crime rates and illegal narcotic industry
  due to penetration by the Colombians.
• Plans to increase impact of social programs by
  emphasizing basics like food, clean water and
  education.
• Decrease administration costs.

8
External Relations

• Border conflicts with Chile have been settled but
  still disputes over maritime limits in the
  Pacific Ocean with Chile and Bolivia.
• In October 1998, Peru and Ecuador signed a peace
  accord to resolve border differences.
• Member of the Andean community of Nations with
  Bolivia, Colombia, Ecuador and Venezuela (in
  process of leaving).
• Free Trade agreements with individual Mercosur
  nations.
• Associate member of Mercosur.
• Member of Asia-Pacific Economics Cooperation
  (APEC) forum and also a member of UN since 1949.
• Strong relations with U.S. and major trade
  partner.
• U.S. Peru Trade Promotion Agreement and Peru
  India Trade pact in process.

9
References

• Background note Peru. (2007). Retrieved 5/19,
  2007, from http//www.state.gov/r/pa/ei/bgn/35762.
  htm
• Historical Exchange Rate Regimes. (2000).
  Retrieved 5/20, 2007, from http//intl.econ.cuhk.e
  du.hk/exchange_rate_regime/index.php?cid16/
• Country Study Peru. (2005). Retrieved 5/19,
  2007, from http//lcweb2.loc.gov/frd/cs/petoc.html
  
• CIA world factbook Peru. (2007). Retrieved 5/19,
  2007, from https//www.cia.gov/library/publication
  s/the-world-factbook/geos/pe.html
• The Economist Country Briefings Peru (2007)
  Retrieved 5/19, 2007, from http//www.economist.co
  m/countries/Peru/profile.cfm?folderProfile-FactSh
  eet