Local Time: Print


Market Overview

Peru continues leading Latin America as one of the fastest growing economies in the region, with an average annual growth rate of 5.7% per year between 2005 and 2016. Peru’s economy grew 3.9% in 2016 and is forecast to grow 2.7% in 2017. The government’s counter-cyclical stimulus spending, consumption, and private investment are the driving forces of this growth. The mining sector and agricultural exports continue to drive the economy, offsetting the losses from the collapse of the Southern Gas Pipeline project and the impact of the Odebrecht scandal on private sector-led investment. The central government has initiated plans for Public Private Partnership infrastructure projects and announced an updated catalog of 61 projects valued at over USD 14 billion. As the economy has grown, poverty in Peru has steadily decreased, falling by more than half from 56% in 2005 to 20.7% in 2016, according to the Peruvian Information and Statistics Agency (INEI). Peru’s steady economic growth began with the pro-market policies enacted by former President Alberto Fujimori in the 1990’s. All subsequent governments have continued those policies, including the administration of President Pedro Pablo Kuczynski, which began its five-year term in July 2016. President Kuczynski campaigned on dislodging stalled infrastructure projects and bringing potable water and sanitation to 100% of Peruvians by 2021. President Kuczynski is a former World Bank official who is committed to private sector-led growth and macroeconomic stability. He is married to an American and is very pro-U.S.

Peru’s currency, the “Sol” (PEN), has been among the least volatile of all Latin American currencies in the past few years. Since the mid-1990’s, the PEN’s exchange rate with the USD has fluctuated between 1.25 and 3.55 per USD. The PEN closed at 3.28/USD on May 26. The PEN appreciated 2.41% against the USD since January 1, 2017 having appreciated 2.06% over the past 12 months.

In its Doing Business 2017 publication, the World Bank ranked Peru 54th among 190 countries surveyed in terms of ease of doing business. The report rates the ease of processes like starting a business, dealing with construction permits, registering property, and obtaining credit. For the complete report please see Doing Business

Market Challenges

The U.S. Embassy in Lima receives regular complaints from U.S. firms of Peru’s cumbersome and inefficient government procurement processes. We continue to work with the Government of Peru to encourage government contracting procedures according to international standards.  One persistent challenge is the reluctance of some government officials to make final contracting decisions for fear of legal liabilities and oversight investigations.  U.S. exporters are strongly encouraged to apply for support from the U.S. Department of Commerce’s Advocacy Center so that the U.S. Commercial Service office at Embassy Lima can support your efforts via Government to Government communication channels.

Dispute settlement generally remains problematic in Peru, and therefore it is recommended to include an arbitration clause in commercial agreements. In 2004, the Peruvian Government established commercial courts to rule on business disputes. With their specialized judges, these courts have reduced the amount of time to resolve a case from an average of two years to just two months. The appeals process resolves most of these cases. However, with the exception of the commercial courts, the judicial system is often extremely slow to hear cases and to issue decisions. A large backlog of cases further complicates businesses’ operations.

Court rulings and the degree of enforcement are often inconsistent and highly unpredictable. Allegations of political corruption and outside interference in the judicial system are common, a situation that analysts think leads to the judiciary receiving low approval rates in public opinion polls. Frequent use of appellate processes as a delay tactic leads to the belief among foreign investors that contracts can be difficult to enforce in Peru.

While the legal framework for protection of intellectual property (IP) in Peru has improved over the past decade, enforcement mechanisms remain weak. Despite PTPA implementation and recent changes in laws, which created stricter penalties for some types of IP theft, certain PTPA obligations remain unimplemented and the judicial branch still has yet to vigorously pursue investigations, convictions, and stiff penalties for IP violations. In response, the U.S. Embassy in Peru established a regional IP attaché office in 2016 to support U.S. exporters facing issues and to provide capacity building for the Peruvian Government.

Both domestic and foreign firms continue to identify cumbersome bureaucratic procedures as impediments to doing business in Peru. For example, shipments are regularly held up for various reasons, including typographical errors on shipping documents. Firms operating in Peru also note difficulties in securing legal solutions to commercial disputes or enforcing arbitration awards.

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  Export.gov is managed by the International Trade Administration and external links are covered by its website  disclaimer statement.

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  BuyUSA.gov is managed by the International Trade Administration and external links are covered by its website disclaimer statement.