Overview of Lima

Economy of Lima

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Economy of Perú

During the last 10 years, Perú has become one of the fastest growing economies in all Latin America. According to the INEI (the National Institute of Statistics and Informatics), the poverty rate decreased by 36% between the same period and the Gross Domestic Product grew by 3.9%.

Concerning Perú's resources, the Peruvian Andes are home large mineral deposits, the largest reserves of silver in the world, as well as the largest gold, lead and zinc reserves in Latin America. Furthermore, the Amazon area also contains rich deposits of oil and natural gas, as well as forest resources, and the coast is renowned for its maritime resources and export-oriented agribusiness.

In order to maintain the country's leadership in economic growth, the government has been implementing measures to reduce bureaucratic barriers to local and foreign investment, encouraging small business and start ups and stimulating capital investment in infrastructure. Even though Perú belongs to trade blocks such as the Asia-Pacific (APEC) Economic Cooperation Forum and the Pacific Alliance, it also has an extensive network of trade agreements. The most recent ones were signed with the United States, China and the European Union. All these agreements have helped to reduce costs for its consumers and for its domestic production.

Economy of Lima

Lima is the country's industrial and financial centre and one of Latin America's most important financial centres. It is the leading industrial, financial, and retail centre in the nation, it is home to many national companies and hotels, and it accounts for more than two thirds of Perú's industrial production and most of its tertiary sector. With almost 30% of the country's population, the city dictates the national economy and accounts for more than two-thirds of the nation's gross domestic product (GDP).

Industrialization began in the 1930s and by 1950, through import substitution policies, manufacturing made up 14% of GNP. In the late 1950s, up to 70% of consumer goods were manufactured in factories located in Lima. The national government has been a traditional leading employer, but during the mid-1990s the privatization of state companies left thousands of people out of work creating a severe unemployment and underemployment. Together with the severe 2-year recession that started in 1997, it left one out of two Peruvians living in poverty.

In 2007, the Peruvian economy finally grew 9%, the largest growth rate in South America. Lima's Stock Exchange rose 185.24% in 2006 and another 168.3% in 2007, making it one of the fastest growing stock exchanges in the world. In 2006, the Lima Stock Exchange became the world's most profitable ever since.

Most of the country's imports and exports pass through the port of Callao and almost all of the country's heavy industry is located in and around Lima. The seaport is also one of the main fishing and commerce ports in South America, covering over 47 hectares (120 acres) and shipping 20.7 million tonnes of cargo in 2007. The main export goods are commodities: oil, steel, silver, zinc, cotton, sugar and coffee.

The Metropolitan area, with around 7,000 factories, is the main industry location. Products include textiles, clothing and food. Chemicals, fish, leather and oil derivatives are also manufactured and processed.

Lima is also chosen to home banks headquarters such as Banco de Crédito del Perú, Scotiabank Perú, Interbank, Bank of the Nation, Banco Continental, MiBanco, Banco Interamericano de Finanzas, Banco Financiero, Banco de Comercio and CrediScotia. Insurance companies based in Lima also include Rimac Seguros, Mapfre Peru, Interseguro, Pacifico, Protecta and La Positiva.

According to Euromonitor International research figures, nowadays, Lima contributes with the 46% of Perú's total GDP. As Perú's centre of an expanding service sector, Lima is experiencing one of the fastest disposable income growth rates in Latin America (22% at constant prices) and the fastest labour productivity growth (25%), over 2011-2016.

However, as mentioned before, the growing unemployment rate and wealth inequality continues to threaten the city's future.

Update 7/05/2019

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