Peru

Peru's economy reflects its varied geography - an arid coastal region, the Andes further inland, and tropical lands bordering Colombia and Brazil. Abundant mineral resources are found in the mountainous areas, and Peru's coastal waters provide excellent fishing grounds.

The Peruvian economy grew by more than 4% per year during the period 2002-06, with a stable exchange rate and low inflation. Growth jumped to 9% per year in 2007 and 2008, driven by higher world prices for minerals and metals and the government's aggressive trade liberalization strategies.

Peru's rapid expansion has helped to reduce the national poverty rate by about 15% since 2002, though underemployment and inflation remain high. Despite Peru's strong macroeconomic performance, overdependence on minerals and metals subjects the economy to fluctuations in world prices, and poor infrastructure precludes the spread of growth to Peru's non-coastal areas. Not all Peruvians therefore have shared in the benefits of growth.

President GARCIA's pursuit of sound trade and macroeconomic policies has cost him political support since his election. Nevertheless, he remains committed to Peru's free-trade path. The United States and Peru completed negotiations on the implementation of the U.S.-Peru Trade Promotion Agreement (PTPA), and the agreement entered into force February 1, 2009, opening the way to greater trade and investment between the two economies.

Source: Central Intelligence Agency; The World Factbook, March 2009