Strong real GDP growth and the introduction of tax reforms have strengthened Peru’s public accounts. However, the country's relatively strong fiscal position is being challenged by ongoing declines in the price of copper, a key source of government revenue. Despite a deteriorating fiscal picture, Peru’s growing middle class will make consumer-related sectors, such as retail and food & drink, increasingly attractive for investors over the medium to long term.

We keep our clients informed of the latest market moves and political developments in Peru, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 19 of Peru’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert research teams. Our aim is to keep you ahead of the curve, so you can feel confident doing business in Peru.

Country Risk

Peru Country Risk

BMI View:

Core Views:

  • The Peruvian economy will strengthen in the coming years, driven by production growth in the extractive sector, robust private consumption and infrastructure investment.

  • The central government will post persistent, though narrowing, fiscal shortfalls due to lower government revenue growth.

  • Weakening trade dynamics will drive depreciation in the Peruvian sol in 2016, with a modest appreciatory trend set to begin in 2017.

Major Forecast Changes:

  • In response to a further weakening of Chinese metals demand, we reversed our forecast for export growth in 2016 and now expect a fourth consecutive year of export contraction, although at a much more modest scale.

Key Risks:

  • ...

Peru Operational Risk Coverage (9)

Peru Operational Risk

BMI View:

BMI View: The most prominent threats faced by businesses operating in Peru are the high crime levels present, especially in urban areas. These are further perpetuated by high levels of organised criminal activity, related rival gang violence, and more risks stemming from financial and cybercrimes. Additional risks stem from the terrorist and drug trafficking activities of the group the Shining Path located in the VRAEM region of Peru, as well as a re-ignited territorial dispute with Chile. Therefore, Peru scores an uncompetitive 39.8 out of 100 for the Crime and Security Risk pillar of the BMI Operational Risk Index. This places the country in 27th place out of 42 Latin American states.


Peru Crime & Security

BMI View:

Peru scores 42.1 out of 100 for Crime and Security Risk.

Crime in Peru poses a serious security risk to potential investors, whether in terms of property crime, crime committed against an individual, or cybercrime. Foreigners from well-developed countries present an enticing opportunity to criminals because of their perceived wealth, but this is normally non-violent and rarely life-threatening. The prevalence of small gangs in larger cities, such as Lima, has contributed to an uptick in 'snatch and grab' robberies, which increases the risk to expatriates. Of equal risk to foreign workers is the rise in assaults and robberies taking place in unregistered taxis that have been collecting foreigners from airports.

Burglary, of both business and residential properties, has become more frequent, occurring mostly during the day and at weekends. Freight theft is also a growing concern in Peru, particularly for mining, oil and...

Peru Labour Market

BMI View:

BMI View: Peru's labour market offers a number of attractions for investors, notably stemming from its large and urbanised population, which boasts widespread vocational skills, and the low overheads incurred from employing local workers. These factors elevate Peru above all of its South American peers, bar neighbouring Chile, as an attractive location for labour-intensive industries, reflected in a regional ranking of sixth out of 42 Latin American states in the BMI Labour Market Risk Index, with a score of 60.7 out of 100. The main drawbacks include an underperforming education system that fails to produce adequate numbers of highly skilled workers, necessitating more extensive training programmes and the import of foreign workers to fill higher-level positions.


Peru Logistics

BMI View:

Peru's relatively developed logistics network is a regional outperformer in the BMI Logistics Risk Index, with an above average score of 59.2 out of 100, placing the country in 52nd place out of 170 nations globally. Within Latin America, Peru is ranked 4th out of 28 countries, behind only Panama, Chile and Mexico. An insufficient level of investment into the maintenance and development of Peru's transport networks has left the country with a low score of 46.7 out of 100 for Transport Quality, the country's worst logistics rating in BMI's index. The score places it 84 th out of 170 countries globally and 12 th out of 28 states in Latin America. However, this is likely to improve with the government planning to invest USD15bn over the next 5 years.

With the exception of the country's 8,808km of navigable waterways, Peru suffers from a substandard network of transport. The...

Peru Trade & Investment

BMI View:

Peru has a weak legal system that offers little protection for businesses and suffers from extensive bureaucracy, hindering an investor's ability to open and close a business. However Peru's strong international ties provide good trade opportunities for investors and promote the country's trade and investment score. Overall, Peru is a regional underperformer for Trade and Investment Risk in BMI's Operational Risk Index, with a score of 45.9 out of 100, which places it 16 th out of 28 countries in Latin America and 94 th out of 170 states worldwide.

Peru's weak legal environment poses the most pronounced risk to investors, which is reflected in the country's low score of 46.6 out of 100 for this indicator in our Trade and Investment Risk Index. The country's law enforcement is considered to be highly corrupt, which has led to poor protection of intellectual property and a lack of confidence in the...

Peru Industry Coverage (26)


Peru Agribusiness

BMI View:

BMI View: We have revised our forecasts for several segments of the Peruvian agricultural sector in our Q1 2016 update though continue to maintain a positive outlook for the agricultural sector as a whole. Export crops such as coffee and cocoa are hampered by infrastructure constraints and a lack of investment; however, as Peru develops and gains recognition for organic and speciality crops, both these sectors stand to benefit. Peru is also set to benefit from cheaper food imports owing to the lower price of grains and weakness in the Argentine peso, as Argentina is a major source of imported grains.

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)


Peru Autos

BMI View:

BMI View: A strengthening economy and rising consumer spending inform BMI's positive view on Peru's new vehicle sales in 2016. We forecast a 2.3% increase, with commercial vehicles set to outperform.

Key Views
Source: BMI
  • New vehicle sales fell over 2015 against the backdrop of an economic slowdown caused by a fall in global demand for Peru's key mineral exports.

  • In this weak environment, heavy commercial vehicles (HCVs) have proved the underperformers. BMI expects this situation to reverse over 2016

Commercial Banking

Peru Commercial Banking

BMI View:

Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Consumer Electronics

Peru Consumer Electronics

BMI View:

BMI View: After a contraction of the consumer electronics devices market in both 2015 and 2016 we envisage a return to growth over the medium term as Peruvian purchasing power increases, which is expected to deepen the market and help alleviate price sensitivity. This trend of households moving up the income scale will both deepen the market as Peruvians acquire sufficient disposable income for first-time device purchases, and present vendors the opportunity to generate wider margins as the middle-class expands. Our forecast for a device spending CAGR of 5.0% 2016-2020 is in contrast to the short-term outlook, with another year of contraction forecast for 2016, albeit with market conditions expected to be less challenging than 2015 when depreciation against the US dollar negatively affected demand through the...

Food & Drink

Peru Food & Drink

BMI View:

BMI View: We maintain a positive longer-term view of Peru's food and drink sector, which will see strong expansion rates and present a number of interesting investment opportunities over the forecast period. Peru's food and drink sector will attract more foreign investment over the coming years, on the back of market fragmentation and increasing household purchasing power. Peru will also look increasingly attractive as key regional markets, such as Brazil and Colombia, experience an economic slowdown.

Headline Industry Data (local currency)

  • Total food consumption growth year-on-year (y-o-y) in 2015: +9.3%; compound annual growth rate (CAGR) 2014-2019: +9.2%;

  • Per capita food consumption growth (y-o-y) in 2015: +7.8%; CAGR 2014-2019: +7.8%;

  • Soft drinks...

Freight Transport

Peru Freight Transport

BMI View:

BMI View: Peru's freight sector will continue to have mixed growth rates in 2016, with a contraction in rail freight volumes of 2.48%, slowing growth in road freight at 1.05%, and the strongest growth in air freight at 2.75%. Rail freight has been affected by low exports of copper and generally subdued metals prices, while road freight growth will improve on 2015 estimates due to moderate growth in trade activity and construction sector growth. Rising private consumption leading to stronger demand for consumer electronics will benefit the air freight sector the most, hence the strongest growth forecast for this transport mode.

The economy in Peru is steadily improving and we forecast GDP growth at 3.8% for 2016, up from 2.2% estimated for 2015. August and September 2015 have however seen below expectations growth rates in GDP. The moderate growth is largely due to a slowdown in Peru...

Information Technology

Peru Information Technology

BMI View:

BMI View: We believe Peru's IT market has quite strong growth potential over the medium term, although economic headwinds will continue to present challenges in 2016. It is one of the smaller regional IT markets, and the local industry is relatively underdeveloped, particularly in the hardware segment. Rising incomes and sol appreciation point to a brighter medium term trend, and we expect vendors to be able to tap into opportunities presented by low device and solution penetration among households and enterprises as economic conditions become more favourable. The major downside risk to our bullish outlook is weaker Chinese demand for the country's raw materials.

Latest Updates & Industry Developments

  • Computer Hardware Sales:...


Peru Infrastructure

BMI View:

BMI View: We expect the Peruvian construction industry to recover in 2016, following a severe contraction in 2016 as a number of key transport and energy projects move forward. Over the longer term, a robust project pipeline, high infrastructure demand and strong political support for infrastructure development will maintain construction growth.

Latest Updates

  • We expect a rebound in Peru's construction industry in 2016. The advancement of high value projects in the transport and energy and utilities sectors, coupled with low base effects, will see the total construction value expand 4.8% in real terms.

  • The steep...

Medical Devices

Peru Medical Devices

BMI View:

BMI View: Although small, the market will grow by a 2014-2019 CAGR of 7.4% in US dollar terms, underpinned by government investment in the health infrastructure, including the establishment of new hospitals and the expansion of the telemedicine service. Lima will remain the most attractive area in the private sector, as the urban population has more disposable income to spend on medical devices.

Projected Medical Device Market 2014-2019
Total (USDmn) Per Capita (USD)


Peru Metals

BMI View:

BMI View: Tin prices will be capped by US dollar strength in 2016, leading us to trim our price forecast to USD14,500/tonne. Beyond 2016, prices will recover gradually as the global tin market posts sustained market deficits and inventories dwindle.

Global - Tin Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f

Peru Metals

BMI View:

BMI view: We have revised our aluminium price forecast from USD1,575/tonne to USD1,600/tonne in 2016, as the tightening market provided an earlier than expected floor in Q116. Aluminium prices will gradually edge higher as the global market moves into a deficit by 2018.

Global - Aluminium Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f

Peru Metals

BMI View:

BMI View: Nickel prices will bottom in 2016 as weak production drags the global market into deficit. For instance, we expect Chinese imports of nickel to grow over the coming quarters. Prices will begin 2016 weaker than we had previously expected and we have thus revised down our 2016 average price forecast to USD9,000/tonne from USD10,500/tonne.

Global Nickel Forecasts
2013 2014 2015e

Peru Metals

BMI View:

BMI View: We have revised down our average copper price forecast for 2016 to USD4,900/tonne. We expect prices to find a floor over the first half of 2016, and begin to stabilise thereafter, supported by production cuts and modest consumption growth.

Global - Copper Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f ...

Peru Metals

BMI View:

BMI View: Gold prices will prove resilient in 2016 due to a dovish shift in global monetary policy and elevated systemic financial sector risks. However, we do not foresee a sustained multi-year recovery and the mining sector will thus remain under significant stress. We forecast slowing mine production growth and increasing consolidation.

BMI Gold Forecasts
2014 2015 2016f 2017f ...

Peru Metals

BMI View:

BMI View: Global steel prices will remain subdued due to a persistent steel oversupply over the coming quarters. From 2017 onwards, steel prices will gradually edge higher as the global steel surplus will narrow due to Chinese supply moderation.

Steel Price Forecast
2014 2015 2016f 2017f 2018f 2019f...

Peru Metals

BMI View:

BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zinc prices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shift the market to a deficit.

Global - Zinc Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f

Peru Metals

BMI View:

BMI View: Lead prices will gradually edge higher as the global lead market will shift into deficit by 2017 as production growth will slow over the coming years.

BMI Lead Price Forecast
Current* 2016f 2017f 2018f 2019f 2020f


Peru Mining

BMI View:

BMI View: Peru's mining industry will ramp up in terms of value and production growth, despite low mineral prices during 2016-2019. Competitive operating costs and a stable business environment will support a strong project pipeline.

Peru Mining Industry Value Forecast (2013-2019)
2013 2014e 2015f

Oil & Gas

Peru Oil & Gas

BMI View:

BMI View: While the Peruvian government is trying to garner investor interest in the country's upstream potential, we believe that lack of below-ground prospectivity, a history of strong environmental opposition and a highly competitive regional market will be the key factors diminishing the attractiveness of the country's oil and gas industry over the coming years.

Headline Forecasts (Peru 2013-2019)
2013 2014...


Peru Petrochemicals

BMI View:

Above-ground risks to the development of the natural gas sector are impeding progress on the development of Peru's downstream petrochemicals potential, which is considerable given the massive size of the country's upstream resources. Completion of any world-scale petrochemicals complex is unlikely before 2020 as the country needs to secure significant infrastructural development before investment can be guaranteed. If Peru realises its ambitions in the petrochemicals sector, it could rival Brazil as a major supplier to the South American polymers market.

From an estimated production of 12.7bn cubic metres (bcm) in 2014, we forecast Peru's natural gas production to increase over the next decade owning to strong domestic demands. This relatively bullish forecast is based on our view that the sector will benefit from a strong reserves picture and recent investments into infrastructure.


Pharmaceuticals & Healthcare

Peru Pharmaceuticals & Healthcare

BMI View:

BMI View: Although Peru has still to overcome several institutional shortcomings in public services, its promising economic outlook and its government's commitment to increased investment in the healthcare sector will be factors contributing to the improvement of Peru's pharmaceutical business environment. We believe that, over the next decade, drugmakers and medical device firms will enjoy revenue growth in the country, in the light of efforts to achieve greater health coverage and improved health indicators.

Headline Expenditure Projections

  • Pharmaceuticals: PEN4.67bn (USD1.65bn) in 2014 to PEN4.98bn (USD1.56bn) in 2015; +6.7% in local currency terms and -4.9% in US dollar terms. Forecast unchanged from previous...


Peru Power

BMI View:

BMI View: Strong growth in electricity consumption, government tenders for power generation and transmissions projects, and robust investor interest in the market continue to support our positive outlook for the Peruvian power sector. We upgraded our forecasts for Peru's renewables as a result of a successful energy tender in February 2016, but future opportunities in the market will be limited by strong growth in hydropow...

Real Estate

Peru Real Estate

BMI View:

BMI View: We expect to see a slower level of economic growth in Peru over the coming years than we previously anticipated; however growth is still set to accelerate and as a result, the real estate sector will benefit. Growth particularly in the retail and industrial sectors will be observed as infrastructure development projects will lend support to the generation of new secondary locations. Such developments will also see demand shift marginally from Lima, and rental rates in secondary locations may be set to rise with demand levels. The capital will maintain its dominance upon all three real estate sub-sectors in the short-term, but over the coming years we may witness an alleviation of pressure upon the city - something which is desperately needed should the market maintain liquidity.

Peru's economy grew at a rate of 2.8% in 2015, predominantly influenced by private consumption and...


Peru Retail

BMI View:

BMI View: The Peruvian economy, which largely depends on natural resources, is bound to have another weak year in 2016. As the country prepares for the runoff of the presidential election, no structural economic changes are set to take place as the long-term political prospects remain unclear. The retail sector will continue to develop, however, as modern shopping centre retail space expands rapidly.

Headline Household Spending
e/f = BMI estimate/forecast. Source: BMI, INEI Peru


Peru Telecommunications

BMI View:

BMI View : MVNO entrance and the continued presence of Bitel and Entel will continue to spur competition in the market, but with the downside risk of decreasing ARPU and revenues. The auction and subsequent deployment of 4G in the 700MHz band will boost mobile broadband subscriptions. Peru however remains an innovative market as new Value Added Services are launched; newly adopted net neutrality rules will further encourage innovation in the market.

Primed For Mobile Growth
Peru Mobile Market Forecasts


Peru Water

BMI View:

BMI View: This quarter we have substantially adjusted our water forecasts, drawing on new data and revising our future projections. Overall, we expect demand to drive investment into the water supply sector, and increased water metering to boost revenues and reduce non-payment risks to service providers. We maintain our positive outlook with regards to infrastructure developments, owing to the need for extensive sanitation developments and additional water supply requirements. However, we note that economic issues might constrain investment.

The water sector has improved dramatically over the past few years. This has largely been due to increased investment by the state and the main water companies, better connections reducing wastewater dumping, increasing revenues, better water...

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