Peru’s Economy Overtakes Chile’s for First Time in More Than 20 Years

Peru’s economy has overtaken Chile’s for the first time in more than 20 years, to become the fifth largest economy in South America, according to the International Monetary Fund.

Newspaper Gestion reported the IMF saying that Peru’s gross domestic product will total about $325 billion in 2012, compared to $319 billion for Chile. The last time that Peru’s GDP was larger than Chile’s was in 1991.

Peru’s government is expected to release the official economic data later this month.

Post has posted strong economic growth during the past decade, often above 6 percent annually. Growth has come thanks to long-term economic policies in place and political stability that has attracted private sector investments to Peru’s vast mining sector, as well as other business areas. More recently, domestic demand fueled by an expanding middle class with a greater appetite for consumer goods has been leading growth.

While Peru’s GDP may have overtaken Chile’s in terms of overall size, the Andean country still has a long way to go in order to catch up with its southern neighbor in terms of GDP per capita and other important economic indicators.

In terms of area and of population, Chile is much smaller than Peru— Peru’s population totals about 30.5 million residents, while Chile’s is at 17.4 million. In 2012, the IMF estimates that Peru’s GDP per capita was $10,679, while Chile’s was $19,255.

South America’s biggest economies are Brazil, with a GDP of $2.37 trillion in 2012, Argentina with a GDP of $747 billion, Colombia at $500 billion, and Venezuela at $402 billion.

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