4. Peruvian economy grew rapidly in the last decade
Real GDP, 2005-2018*
(%Variation)
Source: Central Reserve Bank of Peru (BCRP
Estimated figures of BCRP (Inflation report as of December 2017)
STRONG MACROECONOMIC CREDENTIALS
GDP, 2005-2018*
(US$ Billion)
6.3
7.5
8.5
9.1
1.0
8.5
6.5
6.0 5.8
2.4
3.3
3.9
3.5
4.1
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
2018*
75
88
102
122 121
148
169
189
198 203
192 195
207
219
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
2018*
Source: International Monetary Fund (IMF)
Estimated figures of IMF (World Economic Outlook Database – October 2017)
5. Last December the economy grew 3.3% and in 2016 GDP grew 3.9%, figure
above expectations
GDP 2016 of LA6*
(%Variation)
Source: IINEI, LatinFocus February 2017, Reuters, Ministry of Economy and Finance.
* LA6 refers to the 6 countries in Latin America that have adopted explicit target inflation and have capital markets more development.
0
1
2
3
4
5
6
7
Ene-14 Jun-14 Nov-14 Abr-15 Set-15 Feb-16 Jul-16 Dic-16Jan-14 Jun-14 Nov-14 Apr-15 Set-15 Feb-16 Jul-16 Dec-16
Peru GDP
(annual real%, 12-month moving average)
3.9
2.4
1.6 1.7
1.0
-3.4
Peru México Colombia Chile Uruguay Brazil
STRONG MACROECONOMIC CREDENTIALS
6. Peru continues leading regional growth
Source: CEPAL
Real GDP – Forecasts for Latin America 2017
(Annual Average Variation %)
Average GDP - 2000 - 2016
(Average change in constant prices in dollars)
2.4 2.5 2.5
3.8
4.0
5.1
Argentina Mexico Brazil Chile Colombia Peru
Source: Latin America Consensus Forecast (March 2017) and BCRP for Peru
-3.8
0.5
1.4
1.8
2.4
3.0
3.5
Venezuela
Brazil
Mexico
Chile
Colombia
Argentina
Peru
STRONG MACROECONOMIC CREDENTIALS
13. ... all this, in a frame of macroeconomic stability, Peru records the lowest
inflation rate at a regional level….
Source: IMF (World Economic outlook Database – April 2017) in Peru case , BCRP (inflation report , March 2017)
*Estimated figures
CPI – Latin America 2006- 2016*
(Annual Average Variation %)
CPI – Latin America 2017*
(Annual Average Variation %)
3.1
3.7
3.9
4.3
6.0
Peru Chile Mexico Colombia Brazil
2.4
2.8
4.4 4.5
4.8
Peru Chile Brazil Colombia Mexico
STRONG MACROECONOMIC CREDENTIALS
14. … has maintained stable exchange rates and a level of risk under the regional
average
Exchange Rate in Latin America 2004-2016 (*)
(Index, Base year 2005 = 100)
JP Morgan EMBIG **
(Basic points)
Source: CEPAL
(*) As of August 2016
Source: BCRP
(**) As of February 2017
60.00
70.00
80.00
90.00
100.00
110.00
120.00
130.00
140.00
150.00 Peru
Brazil
Chile
Colombia
Mexico
50
150
250
350
450
550
650
750
850
950
J-07
A-07
A-07
d-07
A-08
A-08
d-08
M-09
J-09
N-09
M-10
J-10
O-10
F-11
J-11
S-11
J-12
M-12
A-12
d-12
A-13
A-13
d-13
A-14
J-14
N-14
M-15
J-15
O-15
F-16
J-16
O-16
F-17
Spread - Peru
(pbs)
STRONG MACROECONOMIC CREDENTIALS
15. Peru maintains a healthy level of debt…
Public Debt– Peru 2005-2018*
(% of GDP)
Public Debt– Latin America 2017*
(% of GDP)
Source: IMF ( World Economic Outlook Database – April 2017) in the case of Peru , BCRP (inflation
report , March 2017)
Source: BCRP.
*Estimated figures, BCRP (Inflation report March 2017)
41.7
33.9
29.9
26.9 27.2
24.4
22.3
20.8 20.0 20.0
23.3 23.8 24.5 25.4
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017*
2018*
STRONG MACROECONOMIC CREDENTIALS
24.5 24.8
45.7
57.2
81.2
Peru Chile Colombia Mexico Brazil
16. … and has accumulated international reserves for a third of the GDP
Net International Reserves 2007 – 2018*
( US$ Billion)
Source: Central Reserve Bank of Peru, March 2017
*projections
NIR Adequacy Indicators
2006 2011 2016*
NIR (% del GDP) 19.6 28.6 31.5
NIR (% short -term foreign debt) 166 471 505
RIN (% Short-term Foreign Debt plus
Current Account deficit)
230 360 349
27.7
31.2
33.1
44.1
48.8
64.0 65.7
62.3 61.5 61.7 63.0 64.7
STRONG MACROECONOMIC CREDENTIALS
17. Source: Standard & Poor`s, Fitch Ratings and Moody´s.
Updated as of February, 2017
Peru earned the investment grade and investor´s confidence by
practicing a responsible political economy
Investment grade
Latin America benchmarking
Countries Moody's S&P Fitch
Chile Aa3 AA- A+
Peru A3 BBB+ BBB+
Mexico A3 BBB+ BBB+
Colombia Baa2 BBB BBB
Uruguay Baa2 BBB BBB-
Paraguay Ba1 BB BB
Brazil Ba2 BB BB
Bolivia Ba3 BB BB-
Ecuador B3 B B
Argentina B3 B- B
Venezuela Caa3 CCC CCC
STRONG MACROECONOMIC CREDENTIALS
19. Non discriminatory treatment: Foreign investors receive the same treatment as local
investors.
Unrestrictive access.
Free movement of capital.
Anti-trust framework and promotion of competition.
Guarantees to Private Property.
No restrictions to acquire equity from locals.
Freedom to access internal and external credit.
Access to international disputes settlement mechanism
Peru participates in the Investment Committee of the Organization for Economic Co-
operation and Development (OECD) – It promotes the implementation of the
Guidelines for Multinational Enterprises.
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
20. INVESTORS
Stability of regulations regarding non
discriminatory treatment.
Stability of income tax regime applicable to
dividends.
Stability to use freely the most favorable
exchange rate available in the market.
Stability of the free availability and
remittance of foreign currency, dividends
and royalties regime.
Requirement: Minimum investment of US$ 5 million in any economic sectors. US$ 10 million for hydrocarbon and mining sectors.
Validity: 10 years. Concessions: Term according to the contracts life (Max. 60 years).
RECEIVING COMPANY
Stability of the recruitment regimes.
Stability of the regimes for the promotion
of exports.
Stability of the Income Tax Regime
Special Regimes: Legal Stability Agreements
Regime whereby the Peruvian Government guarantees:
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
21. Granting the return of the Value Added Tax during the pre-productive stage of the
project (minimum 2-year term).
Applicable to all economic sectors
For agricultural activity it is not necessary to meet a minimum investment amount. For
other activities the minimum investment amount is US$ 5 million.
The project can be divided into stages, phases or similar.
Special Regime: VAT Anticipated Recovery.
Regime whereby the Peruvian Government grants the following benefits:
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
22. A steady tax regime:
Tax Applicable Rate
INCOME
Corporate profits
29.5%
Agriculture and agribusiness 15%
Dividends 5.0%
Royalties 30.0%
Interest rate on loans from abroad 4.9%
Value Added Tax (VAT) 18.0%
Financial Transactions Tax 0.005%
Temporary to net assets, applicable to the
excess of S/. 1 000 000
0.4%
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
23. in the regional ranking
of ease of doing
business in Latin America
.
Continuous effort to facilitate the establishment and operation of business
Position Country
1 Mexico
2 Colombia
3 Peru
4 Chile
5 Panama
92
Paraguay
3rd
Source: World Bank Doing Business 2017
123
149
90
116
158
124
53
114
57
54
187
Argentina
Uruguay
Bolivia
Brasil
Surinam
Guyana
Venezuela
Colombia
Perú
Chile
Ecuador
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
24. Peru has signed and currently has in force Agreements for the Promotion and Reciprocal Protection of Investment
and Trade Agreements of further scope that includes investment chapters that underpin our liberalization policy.
Australia
China 1
Korea 1
Malaysia
Singapore 1
Thailand
Japan
Brunei
New Zealand
Vietnam Argentina
Bolivia
Chile 1
Colombia
Ecuador
Paraguay
Venezuela
Cuba
El Salvador
Costa Rica 1
Panama 1
European Union 2
European Association of
free Trade (Iceland,
Liechtenstein, Switzerland
and Norway)1
Canada 1
United States1
Mexico 1
(1) Trade agreements
(2) Trade Agreement. Besides , Peru has Investment bilateral agreements with Germany, Belgium, Luxemburg, Denmark, Spain, Finland, France,
Holland, Italy, Portugal, United Kingdom, Check Republic, Sweden and Switzerland.
Investment Agreements
It has also signed 8 agreements to avoid double taxation with Andean Community, Brazil, Chile, Canada, Korea,
Mexico, Portugal and Switzerland.
STRONG FRAMEWORK FOR FOREIGN
INVESTMENT
27. Reduced tariff structure with low tariff dispersion
Source: SUNAT – MEF
LEVELS OF
AD VALOREM
TARIFF LINES 2/
NUMBER PROPORTION (%)
0 4,224 55.9%
6% 2,538 33.6%
11% 792 10.5%
Total 7,554 100 %
EFFECTIVE AVERAGE TARIFF % 3.2
EFFECTIVE TARIFF % 1.1
STANDARD DEVIATION % 3.8
OPEN TRADE AND MARKET ACCESS POLICY
28. Working to become a globalized economy,
with preferential access to the world’s largest markets
These countries stand for enlarged
market of over 4 billion people with a
joint GDP over US$ 56 trillion
96% of Peruvian exports
OPEN TRADE AND MARKET ACCESS POLICY
30. AGRIBUSINESS SECTOR
Natural greenhouse.
High agricultural yields: Sugarcane (2nd),
Asparagus, Olives (3rd), Artichokes (4th), Grapes
(6th) and Avocado (11th).
Seasonal windows in major markets.
The 100,000 ha of land currently devoted to
agricultural exports are expected to double as a
result of large agricultural irrigation and expansion
existing projects.
More than US$ 5.000 billion in exports of fresh
and processed products to more than 150
countries.
Organic and Natural Products with high export
potential.
31. Agricultural Exports
(FOB USD million)
Agricultural exports according to target
market - 2016
Fuente:,ADEX Data Trade., BCRP.
AGRIBUSINESS SECTOR
UNITED STATES
32%
NETHERLAND
13%
SPAIN
6%
GERMANY
5%
UNITED KINGDOM
5%
ECUADOR
4%
COLOMBIA
3%
BELGIUM
3%
CANADA
3%
CHILE
3%
OTHERS
23%
1,757
1,971
2,555 2,425
3,177
4,519
4,177 4,231
5,096 5,050
5,581
0
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TRADITIONAL
NON TRADITIONAL
TOTAL
32. MANUFACTURING INDUSTRY
In the last 10 years (2007- 2016) the sector has
experimented an annual average growth of
3.1%, reaching peaks of 10.6 and 10.8% in 2017
and 2010, respectively.
However, during January – December 2016
grew 1.63% due mainly the international
situation, the lower investment in mining projects
and the downturn in fisheries and construction.
In 2017, the sector foreseen to grow 2.2 % and
the next year 3.8% due to the internal market
dynamics at the beginning of several works of
the large projects of infrastructure granted in
concession in recent years and the infrastructure
reconstruction affected by the climatological
recent events.
34. MINING SECTOR
Polymetallic country
36.97% of Peruvian territory does not have
restrictions for mining activities and only
1.28% of the land is taken for mining
exploration and exploitation.
Peru is one of the few countries in the world
with non-metallic mineral deposits, including
diatomite, bentonite, limestone and
phosphate.
In the world: 2°producer of copper and zinc,
3° silver and molybdenum, 4° mercury and
molybdenum, 5° diatomaceous earth and
zinc; and 6°gold. In Latin America: 1° producer
of gold, zinc and lead; and 2nd of copper,
silver, mercury, diatomaceous earth,
phosphate rock and molybdenum.
In 2016, investment in mining reached a value
of US$ 4251 million.
35. 8,504
9,924
8,873
7,525
1,644
0
2,000
4,000
6,000
8,000
10,000
12,000
2012 2013 2014 2015 2016**
Exports structures 2016
*Accumulated investments January to May 2016
Source: Adex Data Trade, Ministry of Energy and Mines
. Statistic report of Mining. May 2016
Mining investments *
(US$ Million)
COPPER
47%
GOLD
31%
ZINC
7%
LEAD
5%
NON METALIC
MINING
3%
OTHERS
7%
MINING SECTOR
36. ENERGY SECTOR
Great energy potential: The wide availability of
water resources and natural gas has enabled to
meet the growing electricity demand in the
country.
In 2015, the national electrification coefficient was
93.3% and the rural electrification was 78%
Resources to be discovered and exploited: There
are other renewable energy sources to be
explored such as solar, wind, biomass and
geothermal sources.
Energy production has grown 206% since 1995. In
2016, the generation in the National
Interconnected System was, 47.6% of hydraulic,
46.5% thermal, 3% renewable non conventional
and 2,9% coal and diesel.
37. /P: Preliminary
Source: MINEM. EVOLUTION OF THE ENERGY SECTOR INDICATORS 1995 - 2015
4,462
12,252
4,075
11,296
2,052
6,275
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1995 1999 2003 2007 2011 2015/P
Energy indicators (MW)
POTENCIA INSTALADA POTENCIA EFECTIVA MÁXIMA DEMANDA DEL SEININSTALLED POWER EFFECTIVE POWER MAXIMUM DEMAND FROM THE SEIN
ENERGY SECTOR
38. HYDROCARBONS SECTOR
The hydrocarbons sector growth begins between
2004 -2005 once the major natural gas reserve,
located near to Camisea rivers, start its production
activities (Camisea project).
Peru is the most important sustainable source
of natural gas in the South American Pacific.
As to 12.31.2015 the proven reserves of natural
gas reaches to 14,09 TCF, and the prospective
resources of natural gas to 60,24 TCF.
For 2025 the estimated demand of natural gas is
between 1900 MCF and 2400 MCF, this comprises
the final consumption, petrochemical and
electricity generation.
Peru has oil fields that have not been explored
(29.97 million ha), making it a potential
petrochemical hub.
39. Source: MINEM. Reserves books of 2015
14.09
3.82
1.97
6.25
60.25
Probadas Probables Posibles Contingentes ProspectivosProven Probable Possible Contingent Prospects
Natural gas reserves and resouces
HYDROCARBONS SECTOR
40. Important cultural destination for archaeological
sites of the Inca and pre-Inca cultures.
Diversity of natural settings. Destination for bird and
orchid watchers.
Important investment by internationally renowned
hotel chains.
The conventions and gastronomic tourism has gained
a significant boost, Lima is considered as one of the
main venues for this international venues and the
gastronomic capital of Latin America.
Increased connectivity of the Peruvian air market
with increased weekly frequencies in international
flights to allow more connections and destinations,
with more and better travel options.
Investment Opportunities in the 8 priority
destinations:
Northern Beaches, Amazon River, Amazonas,
Kuelap, Moche Route, Lima, Nazca, Paracas,
Colca Valley and Puno-Lake Titicaca.
TOURISM SECTOR
41. Source: MINCETUR
(*)Estimated
** As of December 2016 of the main 70 countries
TOURISM SECTOR
South America
55.7%North America
20.1%
Europe
16.6%
Asia
4.2%
Central
America
2.0%
Oceania
1.4%
Africa
0.1%
Tourist arrival per region
of origin **
1.7
1.9
2.1 2.1
2.3
2.6
2.9
3.2 3.2
3.5
3.8
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016*
Tourist arrivals
(Millions of persons)
42. The average GDP growth in the construction in
the past 5 years was 3.3%.
The slowdown in the economy reduced the
demand in properties that were registered until
2013.
Nevertheless in the past year the largest
investment of the sector were directed to the
construction of shopping centers projects.
In order to facilitate the access to a property –
nationwide – the Ministry of Housing and
Construction has implemented the following
Programs and Products:
• Fondo Mi Vivienda: mortgage credit
• Techo propio: Direct subsidy
REAL ESTATE
43. *Comprises credits in Soles and Dollars
Source: ASOCEM – Association of ´cement producers, Superintendence of
Banks and Secures (SBS)
Mortgage credit balance of the financial system
(S/. Million)*
12,021
13,144
16,011
19,952
24,461
29,665
34,205
38,328
39,991
2008 2009 2010 2011 2012 2013 2014 2015 2016
Production and consumption of Cement
(million of Tons)
REAL ESTATE
5.8
6.9
8.3
9.8
10.7
10.4 10.1
5.1
7.0
8.4
10.2
11.3
10.9 10.2
2006 2008 2010 2012 2014 2015 2016
Producción
Consumo
Production
Consumption
44. TRANSPORT INFRASTRUCTURE
Peru has prioritized the development of
transport infrastructure (road, rail, port
and airport) to increase competitiveness
and set a Regional Hub that integrates
Latin America with the Asia - Pacific.
In this perspective the investment
commitments in concessions of the
sector, in 31 projects are around US$
15.281 million, creating its
modernization.
The sector will keep its expansion
towards 2021 through PPP projects and
public works prioritized by the MTC; with
additional investment commitments
around US$ 20.008 million.
INFRAESTRUCTURA DE TRANSITO
Puerto marítimo/Fluvial
Aeropuerto
CENTRO DE PRODUCCIÓN, DISTRIBUCIÓN Y
CONSUMO
Centro de acopio
Principal centro de consumo
Principal centro de producción
Centro de distribución / almacenaje
*Ositran – recongnized investments in the concession contracts –
(January 2017)
45. New Investments in Transport Infrastructure
Programmed for the Ministry of Transport and
Communication for 2016-2021 (1)
(1)source: MTC presentation of the Minister of Transport and Communication in CADE 2016. (2) included projects in Public works and PPPs. (3) includes news investment in port
terminals: Ilo, Salaverry, Chimbote, Saramiriza and Pucallpa (4) includes the third group of Airports Cajamarca, Huánuco and Junín, and the investment of AIJCH and AICC. (5)
included Amazon waterways and the Ferry services in the Amazon. (6) the estimated investment only includes Line 3 of Metro of Lima. (7) Program of Subnational transport
assistance. (8) Traffic management, fleet management, road emergencies, offense process and toll systems.
Strategic objectives (2)
Road, ports, waterways, airports and rail infrastructure
Investment amount
(US$ million)
Asphalt of the National Road Network – 6084 km
Construction of 1000 bridges (700 vehicular traffic, 300 pedestrians walkway)
Double highway Panamerica Tumbes – Tacna 1,807 km
12,613
Upgrading and operation of Port terminals (3)
Upgrading of airports (4)
Multimodal integration system with logistic vision (5)
3,752
Strengthening and development of the Mass transport system (6)
Metro of Lima – Line 3 and commuter train (Lima – Huancayo and Lima – Chincha)
6,051
Asphalt of 5,000 Km of highways. Program “PROREGION”
Asphalt of 2,200 km of neighborhood roads, Program “PATS” (7)
1,362
Implementation of Transport Intelligent system (230) (8) 230
US$ Total MM 24,008