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The transport sector remains a vital aspect of Peru’s economic success, growing by 2.30% in 2016, and by an average of 2.26% in the first eight months of 2017, according to the National Institute of Statistics. This expansion was driven by a 3.05% increase in airport transit, a 4.26% growth in railway transport, as well as respective increases of 2.11% and 0.74% for passenger and freight ground transport. To better compete internationally and accelerate the economic growth of its regions, Peru will have to prioritise reducing its logistics costs. Road transportation remains the area with the greatest future challenges as well as investment potential. That being said, significant upgrades in infrastructure, both at the urban and provincial levels, appear set to take place in the next few years. This chapter features an interview with Javier Lancha de Micheo, CEO, APM Terminals Callao.

In 2017 Peru was struck by the El Niño Costero floods, and some industrial segments were forced to stop production as a result. Despite that, significant growth in non-primary manufacturing segments – such as food products, paper and cardboard, and construction equipment and machinery – helped the sector record a relatively positive outcome for the year. Moreover, driven by the expansion of shopping malls, low prices at supermarkets and pharmacies, and a growing middle class, the retail industry grew by 4.3% in 2017 and is projected by the Lima Chamber of Commerce and the Retail Labour Union to grow by up to 6% in 2018. Furthermore, the 2017 Global Retail Development Index claimed that Peru’s retail industry recorded the largest growth in Latin America, despite an economic slowdown. Peru ranked 9th out of 30 countries based on market attractiveness, country and business risk, market saturation and time pressure. This chapter includes interviews with Rafael Álvarez, CEO, Backus; and Mario Campodónico, CEO, Supermarket Division, Cencosud Perú.

After two years of contraction and a slow first half of 2017, the construction sector recorded much-welcomed growth late in the year. In response to the political challenges and natural disasters of 2017, the government passed two milestone documents: an anti-corruption law and a PEN25.7bn ($7.9bn) Reconstruction Plan. Although the private segment contracted in 2017, positive results may follow from the anticipated public sector revitalisation. Overall, the construction sector is expected to be a mobilising force in 2018. The real estate sector had high expectations for 2017, with the Economic Report on Construction by the Peruvian Chamber of Construction (Cámara Peruana de la Construcción, CAPECO) predicting 6.6% growth. However, the sector ended the year with only 2.4% growth. Despite this, the real estate sector managed to perform 57% higher than other goods and services sectors. Projections for 2018 remain high, with CAPECO reporting that real estate developers have a higher than average growth projection of 80%. This chapter features interviews with Gonzalo Sarmiento Giove, CEO, Inversiones Centenario, and Carlos Neuhaus Tudela, President, XVIII Pan American Games and VI Parapan American Games of 2019.

Having 50% of its electricity generated from renewable sources – of which 42.7% comes from hydro – with this projected to reach 60% by 2025, Peru is making on progress on its goal to support the renewable energy segments. At the same time, the country is currently suffering from an oversupply of energy. This can serve as a growth opportunity, but only if the necessary demand can be identified and harnessed. Recognising untapped markets has the potential to make the energy sector more competitive. For example, electricity demand in the mining sector is estimated at 2 GW in 2018. According to 2017 data from the Central Reserve Bank of Peru, metal mining production increased by 4.2% over the course of the year, compared to the 2.4% drop seen in the hydrocarbons sector. The consistent growth of Peru’s energy sector in the past decade is not anticipated to slow in the near future. This chapter includes an interview with Rik de Buyserie, CEO and Country Manager, Engie Peru.

Contributing around 10% to GDP in 2017, the mining sector is fundamental to Peru’s economy, accounting for significant levels of foreign exchange and tax revenues, as well as the creation of direct and indirect jobs. Supportive legal and tax regimes, low production costs and an abundance of natural resources all contribute to increasing investor appetite, together with a relatively stable macroeconomic and political environment, which has given rise to favourable mining policies. However, the sector is not without its challenges; growth is only just now returning after a period of low commodities prices, while conflicts in mining regions in some parts of the country have made it clear that mining companies need to work more closely with local communities. Still, the recommencement of key projects, rising mineral prices and the pro-business policies of the new administration of President Martín Vizcarra all bode well for the sector. This chapter contains interviews with Luis Marchese, President, National Society of Mining, Petroleum and Energy; and Country Manager, AngloAmerican; and Mariela García, CEO, Ferreycorp.

The Peruvian insurance sector has experienced its fair share of volatility in recent years. After registering gross premium growth of 17.8% and 24.3% in 2014 and 2015, respectively, 2016 saw the industry contract by around 3.5%, according to a report issued by BMI Research. The sector’s poor performance was due mainly to a reduction in investment across the economy, damage caused by the El Niño weather pattern, weaker private consumption and a new regulation that allowed up to 95% of pension funds to be withdrawn. However, the industry appears to have rebounded somewhat, experiencing moderate growth in 2017 encouraged by rising household incomes and personal savings, continuing growth in the individual life segment, and increasing knowledge and popularity of products among the general public. Additionally, innovative products aimed at attracting previously neglected or underinsured areas should provide significant room for the industry to expand.