Peru Economy

Peru Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax System

Basic data

The situation on world markets in 2021 had a favorable impact on the Peruvian economy. Economic activity increased by 13.4% compared to the same period in 2020. Growth was driven by non-primary sectors. In the last months of the year, there should be a reduction in the rate of growth, which will mainly be a reflection of businessmen’s lack of confidence in the course set by the current government.

According to, the continued vaccination (including the third, strengthening dose) had a positive effect on the economic recovery, at the same time, the possible arrival of another wave of the Covid-19 pandemic is a big unknown. The normalization of “spending habits” and the relaxation of anti-pandemic measures should give impetus to the secondary, tertiary and quaternary sectors and contribute to the creation of new jobs. This should be reflected in GDP growth of 2.4% in 2022 and 3.3% in 2023.

The current account of the balance of payments (BÚ PB) registered a deficit of USD billion (2.7% of GDP). The main reasons were the revival of internal demand and thus the pressure on imports, the revival of tourism, higher transport prices (mainly by sea) and delays in the delivery of goods. In 2022, due to the normalization of domestic production and international demand (i.e. a favorable impact on the volume of Peruvian exports), the deficit of the BÚ PB is estimated at 1.6% of GDP. In 2023, the deficit should further decrease, to 0.6% of GDP (reduction in transport prices and increase in exports).

Exports in 2021 reached USD 6 billion (an increase of 14.0% compared to the same period of the previous year), imports USD 48.4 billion (an increase of 18.3%). The trade balance ended with a surplus of USD 14.800 billion. The reason is the favorable prices of metal ores (copper, zinc, gold) on world markets. Exports accounted for 28.1% of GDP. A surplus of USD 16.395 billion is expected for 2022, and even USD 17.847 billion for 2023.

Foreign direct investment (FDI) in 2021 amounted to USD 6.201 billion, which is USD 4.819 billion more than in 2020. The Central Bank expects FDI to grow by USD 5.138 billion in 2022 and then by USD 5.138 billion in 2023 5.708 billion USD. Great Britain had the largest share of FDI in 2021 (22%), followed by Spain (18%), Chile (12%) and the USA (11%). In terms of sectoral breakdown, 63% of FDI went into mining, finance and telecommunications. Specifically, the mining industry contributed 24%, finance 20%, telecommunications 19%. Of the other sectors, industry and energy each participated with 12%.

The budget deficit in 2021 represented 2.4% of GDP. Thanks to high commodity prices and the recovery of the economy, there was a significant improvement in the revenue side of the budget (the deficit reached 8.9% of GDP in 2020). It is expected that the started trend will continue, so that 2022 will close with a deficit of 2.5% of GDP and 2023 with 2.2%.

Year-on-year inflation reached 6.43%, supported mainly by the rise in food and fuel prices and the weakening of the Sol. The value deviated significantly from the central bank’s target of +/- 2%. Among the main risks that influence the development of inflation are: a lower growth rate of economic activity due to mistrust of entrepreneurs and consumers, weakening of the Sol, high prices of fuel and food, crisis in Ukraine.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 2.3 -11.1 13.4 2.3 3.3
GDP/population (USD/PPP) 13,005.90 11,570.70 13,380.00 14,120.00 14,830.0
Inflation (%) 2.1 1.8 4 6.1 3.4
Unemployment (%) 6.6 13.9 10.9 8.5 7.4
Export of goods (billion USD) 47.7 42.4 63.1 70.1 70.4
Import of goods (billion USD) 41.1 34.7 48.4 54.9 55.5
Trade Balance (Billion USD) 6.6 8.2 14.8 15.2 14.9
Industrial production (% change) -2.1 -13.1 18.3 2.5 1
Population (millions) 32.5 32.8 33.2 33.5 33.8
Competitiveness 55/63 52/63 58/64 ON ON
OECD export risk 03.VII 03.VII 03.VII ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -2.8
Public debt (% of GDP) 36.1
Current account balance (billion USD) -6.2
Taxes 2022
F.O 8 – 30%
VAT 18%

Net public sector debt would reach 21.9% in 2021 and increase to 22.4% of GDP in 2022.

Foreign exchange reserves as of December 31, 2021 amounted to USD 78.495 billion. Compared to the same date last year, this represents an increase of USD 3.789 billion.

After the presidential election, there was a sharp rise in the dollar exchange rate, rising to a then record high of 3.98 PEN to 1 USD (24/06). The continuing uncertainty regarding the recognition of the president’s election and his actions causing uncertainty about further economic developments further weakened the Peruvian sol, and on 6/10 the exchange rate even reached 4.137 PEN/1 USD. In the last days of the year, the rate fell slightly below 4 PEN/1 USD. Despite the protracted political crisis in Peru (Congress has already voted twice to impeach the president, since taking office the president already has a fourth government) on April 4, 2022, the exchange rate even reached 3.64 PEN/1 USD. In the following days, the tendency to weaken again began.

A balanced state budget in the amount of 183,029,770,158 PEN was adopted for 2021 (recalculated at the average exchange rate of 2020, it amounts to approximately USD 52.36 billion). Compared to the previous period, this represents an increase of 3.1%. 18.1% of expenditure is allocated to education, 11.47% to healthcare, 3.76% to social programs (mainly to combat poverty and violence against women), 3.2% to waste management, 1.27% to housing and 0.7% for culture and sports.

A balanced budget of PEN 197,002,000,000 was adopted for 2022. Compared to the previous period, this represents an increase of 7.6%. 18.2% is earmarked for education, 11.4% for public debt repayment, 11.3% for healthcare, and 9.7% for transport.

Tax collections in 2021 reached PEN 139.952 billion (16.1% of GDP). Compared to the previous period, this represents an increase of 44.4%.

Income tax PEN 54.877 billion, excise duties PEN 87.319 billion, other taxes USD 11.1105 billion.

Banking system

The Peruvian banking system consists of the Banco Central de Reserva (central bank), Banco de la Nación (represents the government in public and private sector financial transactions), commercial banks and savings banks. To maintain stability, functioning and liquidity due to the Covid-19 pandemic, from April 2020 to July 2021 the central bank maintained the reference interest rate at 0.25%, expanded and simplified the conditions for obtaining liquidity, introduced loans with a state guarantee, softened the conditions for obtaining loan, rescheduled loan repayments. It gradually increased to 2.5% by December 2021. The reason was the maintenance of an expansionary monetary policy. At the beginning of January 2022, the BCPR raised the rate again up to 3%.

Thanks to financial injections to commercial banks and savings banks, the liquidity of the system was maintained. Largest banks: Banco de Crédito BCP (more than 30% of credit operations) – part of CrediCorp, in 2019 profit billion PEN, BBVA, in 2019 profit 498 million PEN, Scotiabank, in 2019 profit 417 million.PEN, Interbank – part of InterCorp Financial Service, in 2019 profit 350 million PEN, Mibanco (focuses on small loans), in 2019 profit 119 million PEN. All banks, except Mibanco (which focuses on microcredit), provide letters of credit. More up-to-date data is not available.

In terms of investment, both domestic and foreign capital are treated in the same way. 45% of the share capital of banks is of foreign origin. The movement of capital is free. Banking operations can be carried out in domestic and freely convertible foreign currencies.

The main supervisory and regulatory authority over the banking system, insurance companies and pension funds is SBS – Superintendencia de Banca, Seguros y AFP.

From April 2020 to July 2021, the central bank kept the benchmark interest rate at 0.25%, a historic low. It gradually increased to 2.5% by December 2021. The reason was the maintenance of an expansionary monetary policy. At the beginning of January 2022, the BCPR raised the rate again up to 3%.

Tax system

Taxes and customs are supervised by SUNAT – Superintendencia Nacional de Aduanas y de Administración Tributaria. The tax system is quite complex.

Corporate taxes: resident income tax 29.5%, non-resident income tax (branches) 29.5% + 5% from other income not directly declared, capital gain tax 29.5%.

Personal taxes: the tax is progressive. From 1 January 2017, it is possible for natural persons (in addition to the basic non-taxable amount of 7 UIT) to deduct specific expenses related to the rental of real estate, interest on a mortgage on a first home, medical and dental services and health insurance payments to domestic staff. In many cases, a maximum of 30% of the total amount paid for the given service can be recognized as a deductible expense. The maximum annual sum of deductible items is 3 UIT (ie for 2019: PEN 13,200). The following tax rates are applied to the remaining accumulated amounts: up to 5 UIT – 8%, 6 – 20 UIT – 14%, 21 – 35 UIT – 17%, 36 – 45 UIT – 20%, over 45 UIT – 30%; capital gain tax – 5/30% (if the gain is transferred abroad, it is taxed at 30%).

VAT – in Peru it is called general sales tax and is 18%.

Tax collections in 2021 reached PEN 139.952 billion (16.1% of GDP). Compared to the previous period, this represents an increase of 44.4%, including excise taxes of PEN 87.319 billion.

Peru should increase the share of tax revenue to 19% of VAT in the next 5 years, by strengthening SUNAT, improving electronic records of sales, simplifying the tax system and canceling some tax exemptions.

Peru Economy