This document provides an overview of Peru's economy presented by Luis Miguel Castilla, Minister of Economy and Finance of Peru, during a roadshow in London in April 2012. Some of the key points summarized are: - Peru has experienced the highest economic growth in the region in recent years with low inflation. Exports are at record levels and becoming more diversified. - Peru has healthy external debt levels, a sound fiscal position, reduced unemployment and poverty, and outstanding economic prospects. - Private investment of around 25% of GDP will help sustain GDP growth of around 6% annually. Major investment projects are planned in mining, electricity, and infrastructure. - Continuing reforms aim to increase tax revenues,

1. In Peru: London
Roadshow
April, 2012
Luis Miguel Castilla
Minister of Economy and Finance

2. Peru – Key Investment Highlights
2
Highest
growth in the
region with
low inflation
Economic
dynamism
across sectors
Exports at
record levels
and increasing
its
diversification
Healthy
external debt
levels
Sound fiscal
position allows
countercyclical
policy
Reduced
unemployment
and poverty
Outstanding
economic
perspectives

3. Peru ranks among the fastest growing economies
in the World and a low inflation
Source: MEF, IMF, Consensus Forecasts.
3
Real GDP per capita
(% cum ch 2008-2011)
LATAM: Inflation 2008-2011
(Average annual % change)
29.0
8.8
5.6 4.5 4.2 3.8 3.4
0
5
10
15
20
25
30
35
Venezuela
Argentina
Brazil
Mexico
Colombia
Chile
Peru
-14,6
-11,0
-7,0
-5,8
-5,2
-4,3
-3,9
-2,9
-1,9
-1,4
0,2
2,7
4,9
11,9
12,2
13,2
17,4
20,4
27,4
41,7
-25 -15 -5 5 15 25 35 45 55
Ireland
Greece
Italy
Spain
United Kingdom
Japan
Portugal
United States
France
Canada
Mexico
Germany
Russia
Korea
Brazil
Taiwan ROC
Indonesia
Peru
India
China

4. Low Debt and High Net International Reserves
Peru: Net Internacional Reserves1
(Millions of US$)
LATAM: Net Internacional Reserves Feb-2012
(% of GDP)
4
Gross and Net Public Debt
(% of GDP)
5
15
25
35
45
55
1999 2001 2003 2005 2007 2009 2011
Gross Debt NetDebt
8,180
17,275
0
10,000
20,000
30,000
40,000
50,000
2000 2006 2012
56,369
10.4 11.1
13.9 14.8
29.7
0
5
10
15
20
25
30
35
Colombia Mexico Brasil Chile Peru
1/ Up to April 4th 2012.
Source: BCRP, Moody’s, MEF.

5. Debt profile: exchange and interest rate exposure
5
Source: DGETP-MEF
December 2006 December 2011
December 2006 December 2011
Public Debt Structure by Interest Rate
(%)
Public Debt Structure by Currencies
(%)
58.622.3
19.1
Dollars
Nuevo Sol
Others
46.1
47.1
6.8
86.9
13.1
Debt denominated in local currency has more than doubled in the last 5 years
Sharply decrease in debt attached to variable rates
58.6
22.3
Fixed
Variable

6. Peru Today: you can go Global or Sovereign
6
S/.
SovereignGlobal
• On Wednesday January 25th, Peru sold bonds for US$ 1.1 billion, the first offshore bid
since 2010.
• US$ 500 million where sold in U.S. dollars, and US$ 600 million in Nuevos Soles.
• The issue in Nuevos Soles represented 55% of the total issuing (an unexpected result).
• The bond demand was 7.2 times the supply in dollars and 4.7 in Nuevos Soles.

7. Solid banking system and low exposure to
European banks
1/ Capital Adequacy Ratio: risk weighted assets and contingent loans to regulatory capital. 2/. As of January, 2012.
Source: BCRP, Goldman Sachs - Latin America Economic Analyst Nov. 2011.
7
European Banks as a Share of Total Bank Credit
(% of total loans)
Dollarization Ratio2
(%)
Solvency indicator of banking1
(%)
Participation of European Banks in LATAM
Financial System (% of bank capital)
48
30
22
0
10
20
30
40
50
60
Mexico Chile Peru
49
29
27
0
10
20
30
40
50
60
Mexico Chile Peru
66
37
77
45
30
40
50
60
70
80
2002 2004 2006 2008 2010 2012
Liquidity Credit
13.3
7
8
9
10
11
12
13
14
15
D-07 J-08 D-08 J-09 D-09 J-10 D-10 J-11 D-11
Banking Law
International Standard
J-12

8. International integration with the rest of the
world fosters trade and investment
8
FTAs Breakdown By Status
Source: PROINVERSION, MINCETUR , MEF

9. Export boom and current account financed by
long-term capitals
Total Exports
(Millions of US$)
9
6 955
17 368
35 565
46 268
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
2000 2005 2010 2011
Current Account vs. FDI
(% of GDP, Millions of US$)
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-5
-4
-3
-2
-1
0
1
2
3
4
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Foreign Direct Investment (FDI) (right axis)
Current Account (left axis)

10. 1/ This index takes into consideration: inflation, interest rate, exchange rate, current account balance, fiscal budget and public debt.
Source:The Economist.
Egypt
India
Polonia
Brazil
Vietnam
Pakistan
Turkey
Argentina
Hungry
South Africa
Taiwan
Venezuela
Czech Republic
Mexico
Colombia
Malaysia
Thailand
Philippines
Hong Kong
Peru
Russia
Singapore
South Korea
Chile
China
Indonesia
Saudi Arabia
0 10 20 30 40 50 60 70 80 90 100
Peru among the economies with better capacity to
face a global slowdown
10
The Economist: Margin for Fiscal and Monetary Policies Maneuvering Index1
Limited space to adopt fiscal and
monetary policies when facing a crisis.
Ample space to adopt fiscal and monetary
policies when facing a crisis.

11. Key Reforms Agenda

12. Tax reform to increase permanent tax revenues
Central Government Tax Pressure
(% of GDP)
12
Tax burden objective: 18% of the GDP for 2016
11.1
11.5
12.812.7
13.6
14.1
14.514.5
13.6
12.8
12.412.312.1
12.913.1
13.6
15.0
15.615.6
13.8
14.8
15.515.3
15.615.8
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
19.0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Average 1990/2009: 13.5%
Average 2006/2011: 15%
18%
Our objective is to increase tax revenues without raising tax rates.

13. Public-Private Partnerships to close infrastructure
gaps
Gap 2008 %
Transportation 13,961 37.0
Airports 571
Ports 3,600
Railways 2,415
Roads 7,375
Sanitation 6,306 16.7
Potable water 2,667
Sewage 2,101
Treatment of poluted water 1,538
Electricity 8,326 22.0
Generation 5,183
Transmision 1,072
Coverage 2,071
Natural Gas 3,721 9.9
Telecommunications 5,446 14.4
Landline telephone 1,344
Movil telephone 4,102
Total 37,760 100.0
Sector
Infrastructure Gap at 2008
(Millions of US$)
Source: The Global Competitiveness Report 2011-2012 (WEF), IPE.
13

14. Competitiveness Agenda for 2012-2013
14
Aim To step up the Peruvian competitiveness, through the increase of productivity and
the improvement of the state efficiency
Strategic
Lines :
(60 Goals)
i) Science, Technology and Innovation
ii) Enterprise development, quality and
productive education
iii) Internationalization iv) Infrastructure
v)I nformation and Communication
Technologies
vi) Facilitation of businesses
vii) Environment
Reporting
Results
July December
Budget by Results
Alignment of resources of the Technical Cooperation
Private Resources

15. Wider Private Pension Funds, Capital Markets
and Financial System
Source: SMV, SBS
15
Private Pension Funds
• Deeper coverage, enhance efficiency and competition
Financial Inclusion
• Electronic money bill.
• Transparency and consumer protection
• Factoring financing for SME’s.

16. Wider Private Pension Funds, Capital Markets
and Financial System
Source: SMV, SBS
16
• Alternative mechanisms to facilitate access to the Public and Private Offering
Market: streamline the securities issuance process by implementing a Private
Offering Regime and improving existent Public Offering regimes.
• Capital Market Internationalization focus on promoting the MILA (Latin American
Integrated Market) by facilitating connectivity with other international markets.
• Broaden investment alternatives encouraging the securities issuance of medium size
firms with mechanisms such as “My First Issuance” that will make the filing process
more agile.
Capital Markets Reform

17. Wider Private Pension Funds, Capital Markets
and Financial System
Source: SMV, SBS
17
• Simplify access for new Mutual and Investment Funds by reducing capital
requirements, improving corporate governance practices and establishing
segregation of duties between commercial and investment portfolio management.
• Listing of state-owned firms: Introduction of regulatory changes to allow public
companies with at least 10% of private capital to operate under the private regime.
• Strengthen Corporate Governance by updating the Good Corporate Governance
Practices Guide in accordance with international standards.
Capital Markets Reform

18. Wider Private Pension Funds, Capital Markets
and Financial System
Source: SMV, SBS
18
Public Debt Market Development
• Develop a complete Sovereign Yield Curve:
Short Term: issuance of 3, 6 and 12 month Treasury Bills.
Medium & Long Term: issuance of 2015, 2017, 2023 and 2042 Treasury Bonds.
• Deeper Market Maker role to facilitate bond market internationalization.
• Introduce repo transactions with Treasury Bonds and Bills to guarantee minimum
liquidity in financial distress scenarios.
• Create a Treasury Bond index to be used as a market risk free reference.
• Establish a retail Treasury Bond Market to favor financial inclusion and promote
savings of small and medium size local investors.

19. Perspectives

20. Business confidence recovers and upward revision
of GDP forecast for 2012
20
Hiring Expectations
(Points)
Cement: Domestic Consumption
(Annual % change)
Peru’s Central Bank Forecasts: Real GDP 2012
(Annual % change)
Private Investment Expectations
(Points)
5.5
5.7
5.0
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Forecast - Dec 2011 Forecast - Mar 2012
Source: BCRP
54
10
20
30
40
50
60
70
J-09 D-09 D-10 J-11 O-11 M-12
36
0
10
20
30
40
50
60
70
J-09 D-09 D-10 J-11 O-11 M-12
-10
-5
0
5
10
15
20
25
30
F-10 J-10 O-10 F-11 J-11 O-11 F-12

21. Private investment around 25% of GDP ensures a
GDP growth of 6% per year
21
Source: MEF, BCRP.
Growth after Investment to GDP reached 25%
(Annual % change)
Private and Public Investment
(% of GDP)
13.1
17.4 16.5 16.0
19.5 19.6 19.9 20.5 21.2 22.0
3.6
4.5
3.8
2.9
5.2 4.6
5.9 6.1
6.3
6.5
16.7
21.9
20.3
18.9
24.7 24.1
25.8
26.6
27.5
28.5
88-92 93-97 98-02 03-'07 08-'10 2011 2012 2013 2014 2015
Year when
Investment to
GDP reached
25%
Avg. Growth of
the next 5 years
World Avg. Growth
of the next 5 years
Chile 1989 7.3 2.6
Taiwan 1980 6.4 2.9
India 1990 5.1 2.6
Peru 2012 6.0 3.7
Country

22. Continue to promote private investment as the
engine of growth
22
Announcement of Private Investments Projects
in the next 2 years (Billions of US$)
Source: BCRP.
Private Investment Projects 2012–2013
(Millions of US$)
34
35
Dec-11 Mar-12
21 232
4 895
1 912 2 260
5 157
Mining &
Hydrocarbons
Electricity Industry Infrastructure Other
Sectors

23. 23
LATAM: GDP 2012
(Annual % change)
Source: MEF, Consensus Forecasts.
LATAM: Inflation 2012
(Dec/Dec % change)
In 2012 Peru will remain as the fastest growing
economy with the lowest inflation in the region
0
1
2
3
4
5
6
Peru Colombia Chile Venezuela Argentina Brazil Mexico
0
5
10
15
20
25
30
35
Peru Chile Colombia Mexico Brazil Argentina Venezuela

24. Ample growth and investment opportunities
24
Vehicle sales per capita 2010
(Vehicles per 1000 inhabitants)
Copper Production 2011
(Thousands of Fine Metric Tons)
Source: Sunat, UNWTO, Geological Service of USA, AEADE, ARAPER, ASBANC, FELABAN, CAVEM, ASOPARTES, CCL, Ripley FELABAN, SBS, Superinterdency of Banks and Financial
Institutions (Chile), Apoyo, Maximize
Supermarkets’ Market Share 2011
(%)
Tourist arrivals 2011
(Millions of persons)
Banking System credits 2010
(% of GDP)
Exports 2010
(Billions of US$)
Vehicle sales per capita 2011
(Vehicles per 1,000 inhabitants)
Banking System Credit 2011
(% of GDP)
3.2
8.7
0
1
2
3
4
5
6
7
8
9
10
Peru Chile
0.4
4.9
0
1
2
3
4
5
6
Peru Chile
Agro Wood & paper
27
45
69
10
30
50
70
Peru Brazil Chile
1,220
5,420
0
1000
2000
3000
4000
5000
6000
Peru Chile
1.1
2.5
2.7
3.0
5.7
0
1
2
3
4
5
6
Ecuador Peru Colombia Chile Argentina
4.8
7.1
9.8
19.4
0
5
10
15
20
25
Perú Colombia Ecuador Chile
17
42 44
51
61
0
10
20
30
40
50
60
70
Peru Brazil Argentina Colombia Chile

25. Main Challenge:
Social Inclusion

26. Main challenge: Poverty erradication
26
Total Poverty by Districts
(% of population)
Source: INEI
0-30%
30-60%
More than 60%
In 2010, poverty remains in
54% of the districts.
Total Poverty 2004 - 2010
(% of population)
48.2
20.0
83.4
61.058.7
30.8
0
10
20
30
40
50
60
70
80
90
2004 2010
Urban
Rural
Total

27. Improvement in the quality of life
27
Source: World Health Organization,ENDES, PpR, INEI, OECD.
1/ The OECD Programme for International Student Assessment (PISA).
2/ Average of all students average score in maths, language and science.
Gaps in access to services 2010
(% of population without services)
40.4
56.0 59.1
14.9
26.8 27.0
0
10
20
30
40
50
60
70
Electricity Sanitation Drinking water
Rural National
Chronic Undernourishment and Anemia
(% of children below 5 year old)
0
10
20
30
40
50
60
70
2000 2005 2007-2008 2009 2010 2011
Chronic Undernourishment
Anemia
International Student Assessment PISA1
Scores 2009 (Average Score2)
439
427
420
401 399 396
369 368
320
340
360
380
400
420
440
460
Chile Uruguay Mexico Brazil ColombiaArgentina Panama Peru
Extreme Poverty 2004 - 2010
(% of population)
5.7
1.9
41.6
23.8
16.4
7.6
0
5
10
15
20
25
30
35
40
45
2004 2010
Urban
Rural
Total

28. Notes: The above table shows ranking of countries for which the Human Opportunity Index has been constructed.
Source: World Bank, UNDP, Bloomberg
1/ http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/0,,contentMDK:21915362~pagePK:146736~piPK:146830~theSitePK:258554,00.html/ date 08/03/2012
28
LATAM: WB Human Opportunity Index vs. Doing Business Index (2012) vs.
Investment Grades
The challenge is to have a country with equal
opportunities for everyone
Human Opportunity
Index
Doing Business Index 2012 Investment Grade S&P
1 Chile Chile 1 Chile A+
2 Argentina Peru 2 Peru BBB
3 Costa Rica Colombia 3 Mexico BBB
4 Venezuela, RB Mexico 4 Brazil BBB
5 Uruguay Panama 5 Colombia BBB-
6 Mexico Jamaica 6 Panama BBB-
7 Colombia Uruguay 7 Uruguay BB+
8 Ecuador Guatemala 8 Guatemala BB
9 Jamaica Paraguay 9 Costa Rica BB
10 Brazil Dominican Republic 10 Paraguay BB-
11 Dominican Republic Argentina 11 Dominican Republic B+
13 Paraguay Nicaragua 12 Venezuela B+
14 Peru Costa Rica 13 Argentina B
16 El Salvador Brazil 14 Honduras B
17 Honduras Honduras 15 Jamaica B-
18 Guatemala Ecuador 16 Nicaragua B-
19 Nicaragua Venezuela, RB 17 Ecuador B-

29. In Peru: London
Roadshow
April, 2012
Luis Miguel Castilla
Minister of Economy and Finance