## Peru: Selected Issues

_IMF Staff Country Reports, May 21, 2024_

## Source details

**Canonical URL:** [Peru: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/05/20/peru-selected-issues-549205)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/05/20/peru-selected-issues-549205/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/05/20/peru-selected-issues-549205/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/05/20/peru-selected-issues-549205/bundle-manifest.json)

## Bibliographic details
- Published: May 21, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400276729.002

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### Executive summary
- The Selected Issues paper focuses on productivity and growth in Peru.
- Firms have maintained smaller sizes to avoid the application of a profit-sharing legislation, which has resulted in lower productivity.
- After a decade of high economic growth averaging over 6 percent per year, potential growth has been falling since 2014.
- A much slower pace of investment and human capital accumulation, but most notably a decline in total factor productivity growth, has driven the decline in potential growth.
- Firm-level productivity has worsened, and the decline has been broad-based across the economy.
- Special corporate tax regimes and labor legislations and regulations have created barriers to productivity growth.

### Key findings and drivers
- Firms choose smaller sizes to avoid profit-sharing legislation, leading to lower productivity.
- Potential growth declined after showing a decade-long average growth rate of over 6 percent per year.
- The decline in potential growth is driven by:
  - A much slower pace of investment.
  - A much slower pace of human capital accumulation.
  - A decline in total factor productivity growth.
- The productivity decline is broad-based across sectors at the firm level.
- Special corporate tax regimes and labor legislations and regulations act as barriers to productivity growth.

### Policy implications and recommendations
- Reform regulations that impose excessive costs to formalizing or growing a business to raise productivity.
- Introduce greater labor market flexibility to:
  - Ensure workers can transition to productive sectors of the economy.
  - Reduce labor informality.

### Publication metadata (from source)
- Publication title: Peru: Selected Issues
- Publication date: May 21, 2024
- Series: Country Report No. 2024/134
- Pages: 42
- Volume: 2024
- Issue: 134
- DOI: https://doi.org/10.5089/9798400276729.002
- ISBN: 9798400276729
- ISSN: 1934-7685
- Subjects/Keywords: Artificial intelligence; Climate change; Environment; International organization; Monetary policy; Natural disasters; Potential output; Production; Productivity; Technology; Artificial intelligence; B. artificial intelligence; B. Measuring productivity; building RESILIENCE; Caribbean; Climate change; El Niño shock; Global; labor force complementarity; Natural disasters; Potential output; Productivity; total factor productivity growth

*Source: Peru: Selected Issues, IMF Staff Country Reports, May 21, 2024.*

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## Content in this bundle

- **Peru: Selected Issues; IMF Country Report No. 24/134; May 2, 2024**
  - [Peru: Selected Issues; IMF Country Report No. 24/134; May 2, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1perea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [Peru: Selected Issues; IMF Country Report No. 24/134; May 2, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1perea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/05/20/peru-selected-issues-549205_