Following a tumultuous beginning marked by social unrest and protests, Peru’s economy is poised for a strong recovery. With stability gradually returning and proactive measures being implemented, Peru is expected to experience significant economic growth in the coming years.
Investors can seize the opportunity as Peru’s economy rebounds, tapping into its potential, capitalizing on emerging sectors, and contributing to the country’s progress within a thriving business environment.
The mining industry is driving Peru’s economic growth. Swiss mining company Glencore recently announced plans to invest $1.5 billion to expand its copper mine in Atapaccay, Peru.
In response to a challenging start to the year, the government has committed to investing billions of dollars to stimulate and strengthen the country’s economy. The projects are scheduled to start later in 2023 and include road infrastructure, energy, and sanitation.
Read on to learn more about Peru’s economic growth and what Glencore’s massive investment means for the country’s mining industry.
SEE ALSO: Taxation advisory in Peru
How Glencore is impacting Peru’s economic growth
In late May, it was reported that mining giant Glencore plans to invest $1.5 billion into its Peru mining operation. This figure far exceeds the $590 million investment that was announced earlier.
“The Coroccohuayco project means expanding the life of the mine until at least 2045 or 2050, that’s our forecast. We estimate the investment will exceed $1.5 billion,” said Carlos Cotera, General Manager of Antapaccay Mining Co.
The objective of this investment is to significantly prolong the mine’s operational lifespan for several decades. The annual production at Antapaccay, one of Peru’s major copper mines, has experienced a continuous decline from 221,000 tonnes in 2016 to approximately 150,000 tonnes currently.
The rise of electric cars has significantly increased predictions for worldwide copper demand soon. As a result, many analysts anticipate a supply shortage due to reduced production and investment in crucial areas. Peru is the second-largest copper producer globally, while its neighbor Chile holds the top spot. Last year, it produced 2.2 million metric tons of copper.
During the initial decade of Coroccohuayco’s operation, the expansion project will elevate production to approximately 250,000 tonnes.
A summary of Peru’s economic growth
Peru’s economic growth is projected at just under 3 percent in 2023. Although it may seem modest, it stands out as it surpasses the average growth rate in Latin America of slightly over 1 percent.
Last year, it received the fourth most foreign direct investment in Latin America, behind Brazil, Colombia and Chile.
In comparison to other Latin American countries, Peru maintains a relatively low inflation rate, which stood at 7.9% in May 2023. It currently has lower inflation than Argentina, Colombia, and Chile.
Peru claimed 13th place in the 2022 Best Countries to Start a Business rankings from U.S. News. The rankings are based on which countries are seen to strike the right balance between stability and expenses.
As the third-largest country in South America, Peru is a member of international organizations such as the United Nations, APEC, Pacific Alliance and the World Bank.
Business Opportunities for Peru’s economic growth
Peru maintains a business environment that generally lacks specific restrictions or requirements on foreign investment. This favorable climate for foreign investors positions Peru as an ideal destination for expansion opportunities.
Over the past two decades, the mining sector in Peru has seen significant investment, leading to increased exploration and development activities. With its abundant geological potential and low production costs, Peru’s mining industry presents attractive investment opportunities.
Peru’s agribusiness industry has experienced substantial growth, with the number of exporting companies increasing from 582 in 2009 to over 945 today. Blueberries, fresh asparagus, grapes, and avocados have been at the forefront of this growth.
Another industry in Peru doing well is tourism. World famous for the iconic Machu Picchu, this tourist hotspot continues to thrive. In 2023, Peru’s tourism sector expects to experience significant revenue growth of 31.8 percent.
Foreign investors should consider Peru for new opportunities due to its robust economy, favorable business climate, and abundant natural resources.
Biz Latin Hub can help you do business in Peru
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Experience our range of personalized services from company formation, accounting and taxation, legal support, hiring, and PEO services. If you seek to leverage Peru’s thriving economic growth, partnering with Biz Latin Hub is a perfect choice.
With a team of experienced experts and ample resources at our disposal, we are well-equipped to assist and facilitate your business ventures, extending beyond Peru to cover the entire Latin American region.
To discover more about our comprehensive services and how we can contribute to your success, reach out to our team of specialists today.
