Ahead of the game:

While GDP growth was expected to reach 6% in 2014, this prediction had dropped to 3.1% by October of that year. Despite the economic slowdown and a delay of some large-scale mining projects, Peru’s economy is forecast to recover in the short term, thanks in part to a range of government-approved measures announced in the first half of 2014 to stimulate private and public investment. Peru in figures Socially inclusive growth: Signs of progress in achieving both strong economic development and poverty reduction Interview: President Ollanta Moisés Humala Tasso Interview: Enrique García Rodríguez, Executive President, CAF development bank of Latin America Andean gem: Peru is poised to prove itself on the international stage Interview: Gonzalo Gutiérrez Reinel, Minister of Foreign Affairs Interview: Jaime Reusche, Sovereign Risk Analyst for Latin America, Moody’s Ahead of the game: With strong fundamentals, the economy is set to see continued growth going forward Interview: Alonso Segura, Minister of Economy and Finance Interview: Alicia Bárcena, Executive Secretary, Economic Commission for Latin America and the Caribbean (ECLAC) Commitment to reform: New short- and medium-term measures to support economic growth Viewpoint: Fernando D’Alessio Ipinza, Director-General, CENTRUM Católica Peru’s capital markets need to develop further to encourage corporate bond issues at home, as opposed to offshore, and boosting liquidity in particular will be key. Foreign interest remains strong, as evidenced by sustained demand for the American depository receipts of Peruvian firms. Looking ahead, the listing of state oil major Petroperú, expected in 2015, has local and foreign financiers excited.

42 43 45 48 54 55 57 58 60 65 67 68 70 75 Interview: Carlos Herrera, Executive Director, ProInversión The fight to formalise: The high level of workforce informality is an ongoing struggle for the government Building blocks: Improving governance and education are crucial to strengthening overall competitiveness Success story: The banking industry looks set to achieve its full potential in the coming years, outperforming other sectors of the economy Interview: Julio Velarde, Governor, Central Reserve Bank of Peru (BCRP) Every little bit helps: The microfinance industry has played an important role in improving social development, despite facing challenges in recent years Interview: Carlos González-Taboada, CEO, Scotiabank Peru Interview: Daniel Schydlowsky, Superintendent for Banks, Insurance and Pension Funds To market, to market: The growth of the capital markets underscores the need for greater liquidity There’s no place like home: Offshore markets dominate the issuance of Peruvian corporate bonds Interview: Christian Laub, President, Lima Stock Exchange (BVL) Interview: José Antonio Blanco, CEO, BTG Pactual Growth opportunities abound: Increasing public awareness could help to boost penetration rates Microinsurance still limited: The regulatory environment must make way for mass distribution Peru is a leading regional producer of natural gas, a growing hub of oil production and a key target of foreign investment. Plans are in place to develop the infrastructure needed to add value to hydrocarbons resources through refining, and the country should be able to achieve long-term energy security once adequate pipelines and transmission networks are built. Expansive thinking: Rapidly increasing demand for energy has led to the roll-out of a number of new projects, as foreign investment in the sector grows Interview: Eleodoro Mayorga, Minister of Energy and Mines Pipeline of opportunity: Plans to develop a pipeline in the south of the country look set to spur industrial development, opening up numerous opportunities An offer they can’t refuse: It looks likely that the economic benefits of energy deals with Peru’s neighbours will outweigh political hesitation Beyond obstacles: Despite the reduced growth outlook, the sector remains promising GDP growth was downgraded over 2014 due to reduced mining activity, with the mining growth outlook for 2015 lowered from 9% to 6.5%. However, in 2016 and beyond, several largescale copper projects will come on-line that could double copper production and add up to 1-2% to GDP growth. In July 2014 the government also introduced economic reforms that rolled back environmental regulations, eased the tax burden on corporations and provided tax guarantees to major investors.

103 108 109 111 112 116 117 120 126 127 131 136 137 139 141 143 146 154 Interview: José Picasso, Chairman, Volcan Compañía Minera Double down: Several planned large-scale copper projects could double production The building engine: Boost from infrastructure is revamping housing development Interview: Jesús Blanco, CEO, InGroup Build and operate: Public-private partnerships are driving up FDI and improving the level of efficiency Interview: Ernesto Tejeda, President, Obrainsa Through the roof: Government housing support and revived interest by private developers Interview: Gonzalo Sarmiento Giove, CEO, Inversiones Centenario One brick at a time: Additional financing instruments to help close the housing gap Important emphasis: Sector development is crucial for economic diversification efforts Interview: Piero Ghezzi, Minister of Production Investment flow: A growing number of retail brands are entering the domestic market Connecting the land: Private investment flows into roads, air and sea ports Interview: José Gallardo Ku, Minister of Transport and Communications On track: Better rail links would cut transport costs and increase ties with Brazil Pushing underground: Lima’s metro network continues its much anticipated expansion Logistical revamp: Regulations to support distribution network efficiency Handling growth: Port infrastructure is getting a boost from new investment Steady progress: Despite slower growth, the sector outlook remains stable Interview: José Chlimper, CEO, Agrokasa 155 158 164 165 167 170 173 174 179 185 186 187 193 198 201 206 208 210 214 216 Choppy waters: Diversification efforts are up as instability over anchovy supply continues On the itinerary: Investment in transport and niche segments supports growth potential Interview: María del Carmen de Reparaz, Vice-Minister of Tourism A time to gather: With a series of large events on the horizon, efforts are under way to expand MICE infrastructure Building up: Hotel investment on the rise to meet growing demand Changing environment: Competition is heating up with new players, better infrastructure and stronger regulation Access for all: The government is working to improve internet access in rural areas Linking the market: Private and public investment are improving competitiveness Bridging the gap: Government spending is increasing as efforts to improve the school system continue Interview: José Dextre Chacón, President, Federation of Private Institutions of Higher Education Interview: Elsa Del Castillo, President, University of the Pacific Funding drive: Partnerships with the private sector are on the rise as the government prepares to address infrastructure gaps PwC Peru The going rates: A summary of the tax laws affecting businesses and individuals Interview: Esteban Chong, Senior Partner, PwC Peru Estudio Echecopar Open for business: Legal reforms encourage more local and foreign investment Interview: Pablo Berckholtz, Managing Partner, Estudio Echecopar, a member firm of Baker & McKenzie International A line in the sand: The Nazca Lines are a mystery in the Peruvian desert A good night’s rest: Hotel listings for Lima, Ica, Arequipa, Cusco and Tumbes Listings: Telephone numbers for government ministries, embassies, business associations, tax and legal services, car hire, travel services and more Facts for visitors: Useful tips for new arrivals The construction sector has benefitted from a rise in public works over the past decade. Peru still faces a lack of key infrastructure, although the government is hoping to address this via PPPs. In the real estate sector, growth is fuelling demand for housing, particularly in the low- and middle-income segments. Challenges remain, however, such as the availability and cost of land in cities. Rising international visitor numbers have continued to boost tourism revenues, while strong economic growth has also stimulated the domestic segment. Meanwhile, meetings, incentives, conventions and exhibitions promise to take on greater importance in coming years. Investors are now focusing on building up Peru’s hotel capacity to keep up with the growing demand.

Increased domestic consumption, exports and investment have led to consistent growth in agriculture for more than a decade; however, the sector’s contribution to GDP has declined over the past 10 years. To address this, the government is promoting investment on the coast while ensuring Andean farmers are integrated into the lucrative export industry.

With sales of $5.5bn in 2013, Peru’s telecoms sector is seeing large-scale investments and the entry of new players, driving competition and raising service quality. The state is pushing to install a nationwide fibre-optic network, and regulatory reforms are clearing the way for mobile virtual network operators.