Peru is one of the region’s fastest growing economies. Between 2002 and 2013, the average growth rate was 6.1% in a context of low inflation (2.6%, on average). A favorable external environment, prudent economic policies and structural reforms in different areas combined to create a scenario of high growth and low inflation. Despite challenging external conditions in 2014, Peru’s GDP growth rate (2.4%) remained above the regional average (0.8%) and inflation was only slightly above the target rate for the year (3.2%).
Growth trends in Peru are expected to remain solid over the next few years above the regional average. Large mining projects are expected to begin in the foreseen future. Additionally, has the capacity to implement countercyclical fiscal policies if required to support aggregate demand and the ongoing application of structural reforms to ensure the continued confidence of private investors.
The effects of strong growth on employment and income have significantly reduced poverty rates and boosted shared prosperity. Between 2005 and 2013, poverty rates fell by more than half, from approximately 55.6% to 22.7% of the population (INEI). It is estimated that in 2013, nearly half a million people escaped poverty in the country. Additionally, the share of the population living below the official extreme poverty line declined dramatically between 2005 and 2013, from 15.8% to 4.7%. Extreme poverty is mainly rural and is concentrated in 8% of the districts in Peru, which are located in the regions of Cajamarca, Piura, La Libertad and Apurímac.
The current governmental program aims to expand access to basic services, employment and social security; reduce extreme poverty; prevent social conflicts; improve the surveillance of potential environmental damage; and reconnect with rural Peru through an extensive inclusion agenda.