BUSINESS FACULTY

CAREER OF ADMINISTRATION AND INTERNATIONAL BUSINESS

TEST ON ECONOMIC-COMMERCIAL REALITY OF PERU

Students:
Jorge Brayanck Lizarzaburu Alvarez
Maryori salvador Gonzales
Jesus Chunga Rodriguez
William Valverde Diaz

Course:
Practicas Pre Profesionales

Teacher:
Cesar Roberto Revilla Paredes

TRUJILLO – PERÚ
2018- 2
 Introduction

In the present test is prepared by students of the International Business and

Administration career in order to talk about the economic reality of the country
using different information as sources, this report is divided into 7 parts plus a
set of annexes.

In the first part we talk about the economic background of the country.

In the second part the analysis and Evolution of the GDP

In the third part, the main economic indicators

In the fourth part, analysis of economic indicators

In the fifth part Economic comparison of the country with respect to the world
economy

In the sixth part, Peruvian culture and changes caused by globalization

Finally, the relationship of culture in the Peruvian economy.

1-2 Economic background of the country and Analysis and Evolution of GDP

The Peruvian economy has presented constant economic growth, between 2002 and 2012,
thanks to the presence of a favorable external environment, favorable macroeconomic policies
created a scenario of high growth and low inflation, thus maintaining an average growth rate of
GDP of 6.1 percent per year. Omitting the index of 2009 that was reduced to 1% in the wake of
the global financial crisis, it would have been worse if in the third and fourth quarters had not
improved the prices of commodities (copper and gold) these products represent the present half
of export earnings.

Subsequently, between 2014 and 2017, the economic expansion slowed down, mainly due to the
fall in the international price of commodities, among them, copper as the main Peruvian export
product, this generated the contraction of private investment.
According to the MEF indicated that 2018 could present a start of a growth phase, this will depend
on the prolongation of the external prices of minerals, which will impact on domestic investment
and thus recover business confidence, Julio Velarde, president of the BCR, I point out that if
companies see that demand is growing, they will have to invest to satisfy the demand and in this
way Peru will enter a positive circle for Peru.
3. ECONOMIC INDICATORS OF PERU

2013 2017
Population (million) 30.5 31.8
GDP per capita 6,676 6,776
(USD)
Gdp (usdbn) 203 216
Investment ( annual 7.9 - 0,3
variation in %)
Unemployment rate 6.0 6.9
Public debt (% of 20.0 24.8
GDP)
Money (annual 7.4 13.0
variation in %)
Inflation Rate (CPI, 2.9 1.4
annual variation in
%)
Exchange Rate (vs 2.80 3.24
USD)
Trade Balance (USD 0.5 6.2
billion)

Exports (USD billion) 42.9 44.9

Imports (USD billion) 42.4 38.7

International Reserves 65.7 63.7

(USD)
External Debt (% of 29.8 35.7
GDP)

4. Analysis of economic indicators

Economic growth accelerated considerably by stronger domestic demand. Private

investment rose at the fastest clip in five years, propelled by improving terms of trade—
particularly of mineral exports—and increasing business confidence. Public investment
also gained steam, buoyed largely by a ramp up in spending on road infrastructure.

The labor market has deteriorated due to the current weakness of the Peruvian economy,
as well as the increase in informal employment and the elimination of formal jobs.

The steady growth of public debt for five years is the result of an increase in the current
flow and dependence on public investments

This drop in inflation is due to the low levels of economic activity.

 Demand for dollars from foreign investors and local banks has caused the dollar rate to
increase in recent years

In 2017, exports totaled US $ 44,918 million, 21.3% more than the previous year, thanks
to an 8% increase in average sales volumes of traditional products abroad, including
fishmeal, copper, gold, zinc and petroleum products. Peru, a mining country, is the
second largest copper and zinc producer in the world. It is also the largest fishmeal, base
input for the food industry mainly of animals.

While imports from Peru amounted to US $ 38,652 million last year, 10% more than in
2016, as a result of increased purchases of consumer goods and supplies, the bank said
in a statement.

In December, the Peruvian trade balance recorded a positive balance of US $ 1,081

million, greater than the surplus of US $ 1,075 million registered in the same month of
2016

5. Economic comparison of the country with respect to the world economy.

5.1 Main Countries according to your GDP

Deficit
Number Country Population GDP Annual GDP PER CAPITA Total debt M$ (%)GDP
1 U. S 325.886.000 17.248.296M$ 52 927$ 18.036.300 -4,19%
2 China 1.390.080.000 10.832.699M.$ 7.793$ 4.494.674 -3,70%
3 Germany 82.850.000 3.263.350M.$ 39 500$ 2.092.643 1,30%
4 U. K 66.238.007 2.324.293M.$ 35 200$ 2.013.316 -1,90%
5 India 1.339.180.127 2.299.275M.$ 1.717$ 1.415.377 -6,65%
42 Peru 32.165.485 187.120M.$ 7.00$ 43.063 -2,34%

Source: IMF
Elaboration: Own

According to the present table, we can observe and compare the Main Countries according to
their GDP, this is the top 5. Peru is in the 42nd position very far behind U.S and China which are
the 2 main powers of the world. The PER CAPITA of Peru is very inferior to the top 5. We have
an average deficit since it is neither so high nor so low it is in the middle compared to U. S which
has -4.19% being the largest and Germany being the best with 1.30%
5.2 Consumer Prices Índex

Number Country Date 2018 CPI

1 E.U July 3.0%
2 China August 2.3%
3 Germany July 2.0%
4 U. K July 2.5%
5 India May 4.9%
42 Peru June 1.6%

Source: IMF
Elaboration: Own

In this table of the CPI, Peru is below the Top 5 of the aforementioned countries, Peru does not
have a high consumer price.

5.2 Exports

Number Country Export

1 China 2.003.477,9 M.$

2 E. U 1.369.146,3 M.$

3 Germany 1.281.912,1 M.$

4 Japan 617.978,7 M.$

5 South Korea 577.130,5 M.$

52 Peru 39.760,7 M.$

Source: IMF
Elaboration: Own

In the following box we can see the 5 main exporting countries in the world, here we will find
China occupying the first place, with 2,003,477.9 M. followed by the US with 1,369,146.3 M. In
addition Peru is in the post 52 remember that Peru is a country rich in minerals which are imported
by China and then export them little by little Peru will grow and will be within the top 50 countries.

6. GLOBALIZATION AND CHANGES IN PERU

Cultural identity is being part of our place in Which we live or the place you HAD your origin.
But it is here today That everything has changed since the Cultural identity has-been influenced
by economic integration Among Countries, international free trade and transnational companies
and homogenisation Between different cultures.
Globalization can be Understood as the recent phase of the secular process of economic
internationalization, Which Began in the last Decades of the Twentieth Century, with major
changes to the global monetary, foreign exchange, energy, commercial and technological level.
Increasing globalization is the integration of national economies into a global single market
economy. The process depends on economic growth, technological advance and human
connectivity (transport and telecommunications).
To Begin with the issue, many people are born in one country and you are That Means from the
place Where you were born.
Globalization Creates a strong influence on the cultures of the country clubs it is Necessary to
interrelate and interact With each of them, the culture gap is getting narrower, Because
technological advances That Occur in other parts of the world and reach our country are thanks
to globalization, the way we dress and communicate, to the music we hear Often is influenced by
globalization, YouTube is a website for more great videos of The World, Where we can watch
movies, music and series of other country clubs and Often see on television, do not escape
globalization as it is a global trend to Peru That Allows arrives.
social networks and the Internet are Media That Have Given thanks to globalization, and music
ipaid That is thanks to They hear globalization. So this Directly influences in the culture of our
country? Clear why we can now observe many young people with new hairstyles, new music to
listen to, new movies to see, in Addition to the medicines and drugs created abroad can reach
the Peru thanks to globalization.

INFLUENCE IN PERU

Peru has more than relationships With one hundred Countries; It has signed economic
agreements With regions and countries (economic complementation and free trade agreements);
It has active participation in international, regional and subregional bodies (Security Council of
the UN, the ILO, Inter-American Commission on Human Rights, Inter-Parliamentary Union); It is
proactive towards international security and the inclusion of the poorest and MOST driver of
Summit initiative to combat poverty and hunger; It has hosted events worldwide (APEC Summit
and Summit ALCUE, 2008).
In Peru, globalization is Understood as a process of liberalization of movement of capital goods
and services. Since early 90s a development model based on economic activity seeks That
competition in the country is regulated by the markets was ADOPTED.
The process continued to trade agreements and the Economic Complementation deepened With
Agreements and Free Trade Agreements (FTAs) signed by Peru, in Which goods and services
are freely traded.
While it is true there are significant advantages in globalization, Particularly in the economic and
the cultural exchanges That Enrich the People with information and Opportunities Until recently
unsuspected. However, globalization Also presents significant degree of uncertainty and risk still
unmeasured such as: excessive reactions nationalism, economic protectionism, etc. All this
demand continue analyzing and reviewing the scope of esta process over time.

HIGHLIGHTS FROM THE FINDINGS: DNA OF CULTURE FOR THE DEVELOPMENT OF PERU

economy Education Governance Social Gender Communicatio Heritag

n e
 1 GDP
2 job
3 Household expenditure
4 Inclusive education
5 Education plurilingue
6 Artistic education
7 Vocational training
8 Regulatory framework
9 political and institutional framework
10 infrastructures
11 civil society in governance
12 Participation outside the home
13 Fortifying participation of identity
14 intercultural tolerance
15 interpersonal trust
16 self-determination
17 Inequalities men / women
18 Perception of gender equality
19 Freedom of expression
20 Internet use
21 Diversity of content in TV fiction
22 Sustainability Heritage

Source: UNESCO

The economic dimension analyzes the contribution of the cultural sector to economic
development by assessing the contribution of culture to GDP activities, the role of culture as a
provider of employment, and how cultural goods and services are valued through commercial
transactions.
Private and formal cultural activities, excluding government contributed 1.58% to the Gross
Domestic Product (GDP) of Peru. 26% of this contribution comes from the central cultural
activities and 74% support activities or equipment. The contribution of 1.58% is significant when
compared referentially with other important industries, such as the wood industry and furniture
(0.9%), the activities of fishing and aquaculture (0.7%) sector activities electricity , gas and water
(1.7%).percentage of the contribution of the formal private and Cultural activities to GDP.

Source: (Unesco) Magaly Robalino.2016

7. HOUSEHOLD SPENDING IN CULTURE

This indicator refers to the cost of Peruvian households in culture, ie, the percentage of final
consumption expenditure of households in activities, cultural goods and services, with respect to
all of their consumer spending. In 2017, this indicator reached 4.0% which is above the spending
on communications, household items and drinks.
PERU: STRUCTURE OF REAL PER CAPITA EXPENDITURE, ACCORDING TO 12 GROUPS
EXPENDITURE (CCIF), 2007 and 2017
2007
 Food consumed in the home 186 31,40%
Housing, water, electricity, gas and other
97 16,40%
fuels
Food consumed outside the home 81 13,70%
Health 47 7,90%
Transport 38 6,40%
Miscellaneous goods and services 29 4,90%
communications 25 4,30%
Education 23 3,80%
Recreation and culture 22 3,70%
Clothing and footwear 22 3,60%
Furniture,. for home and for consevar.
21 3,50%
Ordinary household
Alcoholic beverages and drugs snuff 2 0,30%
Servcios accommodation 0 0,00%
Source: INEI - National Household Survey, 2007-2017.
Elaboration: Own
2017

Food consumed in the home 194 26,50%

Housing, water, electricity, gas and other
143 19,50%
fuels
Food consumed outside the home 98 13,40%
Health 59 8,00%
Transport 53 7,20%
Miscellaneous goods and services 37 5,10%
Clothing and footwear 32 4,30%
Education 30 4,10%
Recreation and culture 29 4,00%
communications 29 3,90%
Furniture,. for home and for consevar.
27 3,70%
Ordinary household
Alcoholic beverages and drugs snuff 1 0,20%
Accommodation Services 0 0,10%
Source: INEI - National Household Survey, 2007-2017.
Elaboration: Own

According to expenditure groups, has increased recreation and culture by 9.6%, transport 3.4%,
rental housing and fuel by 2.8%, alcoholic beverages and narcotics 2.5% and clothing and
footwear 2.1%. Meanwhile, they decreased in: food consumed outside the home by 3.6%,
education by 3.4%, within the household consumed 2.4% in food and furniture and fixtures and
1.9%.
PERU: VARIATION OF REAL SPENDING PER CAPITA SPENDING BY 12 groups (CCIF),
2017/2016
 R e c re a t io n a nd C ult ure 9,6
T ra ns po rt 3,4
H o us ing, wa t e r, e le c t ric it y, ga s a nd o t he r f ue ls 2,8
A lc o ho lic be v e ra ge s a nd drugs s nuf f 2,5
C lo t hing a nd f o o t we a r 2,1
M is c e lla ne o us go o ds a nd s e rv ic e s 1,4
A c c o m m o da t io n S e rv ic e s 1,3
c o m m unic a t io ns 0,4
H e a lt h -1
F urnit ure , ho us e ho ld e quipm e nt a nd ro ut ine ho us e ho ld m a int e na nc e -1,9
F o o d c o ns um e d in t he ho m e -2,4
E duc a t io n -3,4
F o o d c o ns um e d o ut s ide t he ho m e -3,6
Source: INEI, 2017
Elaboration: Own

Conclusion:

 In view of being a country rich in natural resources and according to the Doing Business
ranking of the World Bank, we are ranked 58 out of 190 countries worldwide and
occupy the third position in South America, below Mexico and Chile, displacing to
Colombia to the fourth place, it means that we have an advantage in terms of the ease
of doing business, we have a very important business potential.
 Economic growth is expected to remain robust in the coming quarters, underpinned by
solid domestic demand. The recent minimum wage hike, modest inflation and rising
employment are seen supporting private consumption, while low borrowing costs and
healthy credit growth should propel capital spending ahead. The main downside risk to
the outlook stems from political instability, however.

 The difference between Peru and the main countries of the world is great, not only the
GDP but also the CPI and exports, this shows us that Peru still can not be a world
power, Peru is a country in full economic development thanks to its natural resources.
In a few years Peru could be a developing country improving its economic results

 Globalization creates a strong influence on the cultures of the countries it is necessary

to interrelate and interact with each of them, the cultural gap is getting narrower,
because technological advances that occur in other parts of the world and reach our
country are thanks to globalization, the way we dress and communicate, to the music
we hear often is influenced by globalization

Sources:

https://datosmacro.expansion.com/ipc-paises
https://datosmacro.expansion.com/paises/grupos/fmi
https://www.focus-economics.com
https://es.unesco.org/
https://www.inei.gob.pe/