Like all economies, Peru was greatly affected by the pandemic but their economic situation has been steadily improving since the end of 2021 with 2.7% growth in 2022 and an expected growth of 4.5% in 2023. Outside of their economic growth, Peru also has one of the lowest debt to GDP ratios in Latin America with debt accounting for 34.4% of their GDP in Sep 2022.
Given its diverse and resource rich geography, Peru is packed with agricultural and industrial opportunities; in fact the industrial sector contributes around 30.4% of GDP and the agricultural sector makes up approximately 7.5% of the country’s GDP, employing 27.3% of the population. In particular, Peru is famous for mining; it is the number one producer of silver in the world but also focuses on copper and gold extraction as well as natural gas, oil, textiles and food processing.
Peru has a long history of high quality garment production which has earned international recognition; the textile industry, particularly, is known for its high quality materials such as: cotton (Pima and Tanguis); fibres from vicunas and alpacas and artificial fibres used for making clothing and fabrics. Within the textile industry there are more than 45,000 companies, generating over 2.1 million in imports and 1.4 million in exports per year; it is this international presence in the global textile market that has enabled the textile industry to bounce back from the impacts of the pandemic because international investors continue to look to Peru for suppliers who can meet their needs.
Since Peru is so resource rich, many companies benefit from vertical integration; that is to say they control the entire supply chain which is important for Peru because it means they are able to produce for big multinational companies such as Lacoste, Ralph Lauren, Nike and others.
Thanks to its location, lack of tariffs and its trade agreement with Peru (USPTA), the US is the leading destination for Peruvian textiles, contributing to just under 70% of total shipments. There is also high demand for protection equipment, towels and hospital bedding; this industry in Peru is expected to replace Chinese suppliers who can't supply products which match the quality of Peru.
It is clear that Peru has a bustling textile industry along with its global mining presence. Looking forward to a post-covid global economy, Peru should continue to be a major player in both these industries.