Peru	In 1996, Peru paid out $12.27 in debt service for every $1 received in aid grants

• Background
• The Stats
• Jubilee 2000 in Peru
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Background Peru was one of the worst-affected countries during the 1980s debt crisis. External debt doubled during the decade, as the country borrowed to finance its current account deficit. Negative economic growth during this period made it difficult for the government to pay back even just the interest on exisiting loans. Total debt stood at $30.5 billion in 1997, over 50 per cent of GNP. Half of the debt is owed to bilateral creditors (mainly western governments).

The ratios of debt service to exports are far above what even the IMF considers sustainable. NPV of debt to exports is 318 per cent, and debt service to exports is 35 per cent. The "sustainable" ratios are 200-250 per cent and 20-25 per cent respectively.
The government paid $2.5 billion in debt service in 1996. This is more than was scheduled, is over 30 per cent of government revenue and is more than was spent on healthcare.
The government has made payment of debt a priority in its bid to win foreign direct investment.

In 1996 $5.7 billion of Paris Club debt was rescheduled, and $2.2 billion of commercial debt.

HIPC Initiative
Although Peru is classified as severely indebted, it is a middle income country and therefore not considered eligible for HIPC assistance.

The stats

Key indicators       Total debt 1996 (EDT) ($ million) 29,176 Total debt service 1996 (TDS) ($ million) 2,932     Debt per person 1996 ($) 1218 Debt service per person 1996 ($) 122 GNP per person 1996 ($) 2,480     Debt to exports ratio 1996 (EDT/XGS) 352 Present value debt to exports ratio 94-96(PV/XGS) 318 Debt to GNP ratio 1996 (EDT/GNP) 49 Debt service to exports ratio 1996 (TDS/XGS) 35

Top five bilateral creditors	Main export commodities	Main export markets
	Copper
Japan	Marine products	USA
France	Manufactures (non-traditional)	Japan
USA	Textiles	Germany
Italy	Petroleum	Italy
Germany	Zinc	UK

 

 

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This profile is part of our country of the week section. Each week we will be featuring the background statistics and campaign information of the one of the most indebted poor countries.