Peru - Balance of payments

Peru's export earnings depend heavily on world market prices in metals and fish meal. Peru maintained a favorable balance of trade from 1966 to 1973; but a surge in the price of oil imports, a decline in world copper prices, and a drop in fishing exports reversed this trend. The trade balance began to improve in 1976 and 1977, but rising interest payments kept current accounts at a loss. An austerity program was adopted in 1978; by the end of the year, Peru had reduced the deficit on current accounts, thanks in part to IMF loans. The surplus rose in 1979 and 1980 because of an extremely favorable trade performance and an additional infusion of public-sector capital. During the 1980s, however, Peru's export position was negatively affected by the worldwide recession and by lower world mineral prices, resulting in a negative trade balance, which, together with rising interest payments on the foreign debt to the IMF, led once again to an overall payments deficit. During 1990, Peru experienced a trade and capital surplus, but a deficit in the current account. Exports fell, while imports grew largely due to overvalued exchange and because government subsidies promoting exports were eliminated. With the reforms of the Fujimori government during the 1990s, trade liberalization more than doubled the overall trade volume during the decade. Unfortunately, the current account balance remained low; between 1992 and 1999 the balance of payments deficit was over 5% of GDP. In 2002, the IMF approved a two-year $316 million standby agreement with Peru.

The US Central Intelligence Agency (CIA) reports that in 2001 the purchasing power parity of Peru's exports was $7.3 billion while imports totaled $7.4 billion resulting in a trade deficit of $100 million.

The International Monetary Fund (IMF) reports that in 2001 Peru had exports of goods totaling $7.11 billion and imports totaling $7.2 billion. The services credit totaled $1.5 billion and debit $2.3 billion. The following table summarizes Peru's balance of payments as reported by the IMF for 2001 in millions of US dollars.

Current Account	-1,098
Balance on goods	-92
Balance on services	-800
Balance on income	-1,203
Current transfers	997
Capital Account	-67
Financial Account	1,031
Direct investment abroad	…
Direct investment in Peru	1,064
Portfolio investment assets	-298
Portfolio investment liabilities	-6
Other investment assets	66
Other investment liabilities	205
Net Errors and Omissions	533
Reserves and Related Items	-399