Canada and Peru have had a close commercial relationship for many years. Peru is our third-largest bilateral trading partner in South and Central America and the third-largest destination for Canadian direct investment in the region.
Peru, Canada and the world
Peru can be a promising destination for Canadian companies due to its strong macroeconomic credentials, friendly business environment and wide range of investment opportunities. Financially, Peru has one of the region’s lowest public debt-to-GDP (gross domestic product) ratios and a solid and independent central bank. It also offers a robust investment framework that guarantees a variety of special regimes for international investors, including legal stability agreements on income tax regulations and dividend distributions. According to S&P Global Ratings, Peru enjoys a stable outlook based on its resilient economy and is currently rated BBB with one of the strongest credit ratings in the region.
Peru also has free trade agreements (FTAs) with the world’s most important economies and is integrated into global markets through trade blocs such as the Pacific Alliance. On the Canadian side, the 2009 Canada-Peru FTA has made our trade relationship with Peru progressively stronger, totalling $12.7 billion of Canadian foreign direct investment in 2021. Both our countries belong to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the largest trade blocs in the world.
Peru and the pandemic
At the onset of the pandemic, Peru imposed some of the toughest lockdown measures in the region, instituting a shutdown of all non-essential businesses for several months. This had a severe impact on the economy and led to a double-digit contraction in 2020. But in 2021, the country’s GDP rebounded by more than 13%, stimulated by domestic demand and a strong expansion of public and private spending.
Some pandemic-related challenges remain such as supply chain disruptions, supply shortages and falling demand for products and services. Current major concerns are related to political instability, weak government institutions and potential reforms that could affect the business environment and investors’ perceptions of risk.
Peru’s economic environment
Peru recorded the highest growth rate in the region in 2021 and offers export and investment opportunities across multiple sectors, especially infrastructure and mining. For the mining industry, projects currently in the pipeline are projected to be greater than US$53 billion over the next few years. For infrastructure, the government is promoting a portfolio of major public private partnerships (PPP) projects that represent investments of US$9 billion.
Learn more about opportunities in Peru here: https://www.edc.ca/en/article/peru-market-to-watch.html