A country to keep an eye on
Widely known for its exquisite cuisine, stunning holiday destinations and archaeological sites, Peru is a country that is taking the world by surprise.
Although still listed as the forty-seventh largest economy in the world by its total GDP, for most of the past two decades Peru has been the fastest growing economy in Latin America, proving to be steadily and strongly pushing towards growth through diversification and collaboration.
Since the 1990s, when structural reforms started being implemented, Peru has been on a mission to progressively open its economy to the world by creating a healthy and favourable environment for foreign investment and international collaboration. From its inexpensive labour, its non-restrictive policy on dividends and the signing of Trade Agreements with strategic partners, the Peruvian market remains one of the most attractive markets in the Latin American region, currently coming fifth in the top largest Latin American economies.
Peru has several Trade Agreements, the most outstanding ones according to their trade statistics results being their agreements with China, the United States, Japan, and the European Community. The UK-Andean trade agreement however should also be highlighted as it is the key access for UK traders and foreign investors into the Andean market.
Peru at glance
By the end of 2022, Peru has shown an economic growth of 2.7%, which continues the trend that it has had for the past decade, and which was briefly disrupted by the 2020 COVID pandemic, confirming its resilience as a country and its determination to overcome challenges and with strong economic foundations to share the stage with trading leading markets; more evidence of this is that in that same year, their GDP per capita closed on USD$7,125.83, and in 2023 this number increased to USD$7,668.66.
As with most developing companies, especially in Latin America, Peru’s strongest trading pillar remains the export of primary goods, mainly from the mining sector, which has gained Peru an outstanding position among the global leaders in the production of copper, gold, and zinc. Peru is also an exporter of fresh produce, namely fruits, such as grapes, blueberries, and avocados.
When it comes to exports, Peru’s top trading consumers are China, the USA, South Korea, Japan and Canada. As for imports, China and the USA remain Peru’s strongest suppliers, followed by Brazil, Argentina and Mexico.
Peru and the UK, a promising friendship
Despite its steady growth, welcoming FDI policies and the Trade Agreement in place, Peru remains a market very much unexplored to UK commodity and service traders. As of January 2024, Peru continues to be the 91st largest UK export market, with a total of £392 million in exports reaching this country, representing less than 0.1% of total UK exports overall.
However, whilst the export sector to Peru remains somewhat dormant, the Foreign Direct Investment has a different story to tell. The UK is currently Peru’s largest Foreign Direct Investor, with a 20.9% market presence coming mostly from the mining sector.
The UK’s top 10 exports to Peru are:
The above graphics are taken from Department for Business and Trade.
The top 10 products imported by Peru nevertheless are: Industrial Machinery, Oil & Mineral Fuels, Electrical Machinery, Motor Vehicles & Parts, Plastics, Iron & Steel, Cereals, Iron & Steel Articles, Pharmaceuticals, and Chemical Products.
As for imports in services, it is a market that represents a white sheet for adventurous service providers looking to establish in markets where there are virtually just a handful of competitors but where there is a lot of work to do when it comes to development and innovation.
Peru is in a few words a blooming market worth exploring, a welcoming partner on the other side of the world.
Temporary Imports into Peru
True to its commitment to strengthening its trading relationships with international partners, from 30 April 2024, Peru will be accepting ATA Carnets for the temporary importation of commercial, non-perishable goods into its territory, becoming the 79th member of the ATA Carnet convention.
This scheme will permit businesspeople to visit the country with commercial samples, professional equipment, or goods intended for trade fairs and exhibitions without the need to submit regular export and import declarations and pay import duties and taxes, allowing traders to explore potential opportunities before deciding to take the leap.
You can read more about ATA Carnet in our latest news.
Bespoke market research
The London Chamber, through its Business Information Services, available to Premier Plus Members, can help companies access specialised overseas market information. Our reports include:
- Overview of the country’s economy
- In-demand products and services from the UK
- Information on export and import procedures
- What to expect when doing business in the country
- UK and worldwide import and export data
Sources
This country snapshot was prepared with information compiled from: Department for Business and Trade, European Commission, World Bank, Lloyds Bank, ONS and Trading Economics.
Produced by Elizabeth Skewes, Trade Services and Business Development Manager, LCCI.
