WHY INVEST IN PERU WHY INVEST IN PERU

WHY INVEST IN PERU?

WHY INVEST IN PERU? 1. Peru’s strong macroeconomic credentials 2. Strong framework foreign investment 3. Trade integration policy – market access 4. Attractive sectors to Invest

PERU’S STRONG MACROECONOMIC CREDENTIALS Peruvian economy grew rapidly the last decade and Peru continues leading the regional growth Real GDP, 2004 -2018* (%Variation) 7, 5 8, 5 9, 1 Real GDP – Forecasts for Latin America 2017 (Annual Average Variation %) 8, 5 6, 3 6, 0 5, 8 2, 4 3, 3 3, 9 2018* 2017* 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2, 8 Argentina 2, 7 2, 8 1, 0 2005 Perú 4, 2 Average GDP - 2000 - 2015 (Average change in constant prices in dollars) Colombia 2, 2 México 1, 8 5, 2 3, 9 2, 5 2, 7 4, 2 Chile 1, 6 2, 9 Brasil Venezuela Mexico Argentina Brazil Chile Colombia 0, 6 -5, 0 Peru Source: Central Reserve Bank of Peru (BCRP), International Monetary Fund (IMF) • Estimated figures of BCRP (Inflation report as of June 2017), Latin American Consensus Forecast (May 2017)

PERU’S STRONG MACROECONOMIC CREDENTIALS Peru records the lowest inflation at the regional level CPI – Latin America 2017* (Annual Average Variation% CPI – Latin America 2006 - 2016* (Annual Average Variation %) 6, 0 3, 7 3, 9 Brazil Colombia 4, 8 4, 3 2, 8 3, 1 Peru 4, 4 4, 5 2, 2 Chile Mexico Colombia Brazil Peru Chile Source: Central Reserve Bank of Peru (BCRP), International Monetary Fund (IMF) • Estimated figures of BCRP (Inflation report as of June 2017), IMF (World Economic Outlook Database – April 2017) Mexico

STRONG MACROECONOMIC CREDENTIALS Peru maintains a healthy level of debt…and has accumulated reserves for a third of the GDP Public Debt– Latin America 2017* (% of GDP) Public Debt– Peru 2005 -2018* (% of GDP) 41, 7 81, 2 33, 9 Source: BCRP. *Estimated figures, BCRP (Inflation report June 2017) 23, 3 23, 8 25, 8 26, 6 57, 2 2018* 2017* 2016 45, 7 2015 2014 2013 20, 8 20, 0 2012 22, 3 2011 24, 4 2010 2009 26, 9 27, 2 2008 2007 2006 2005 29, 9 24, 8 25, 8 Chile Peru Colombia Mexico Brazil Source: IMF ( World Economic Outlook Database – April 2017) in the case of Peru , BCRP (inflation report , June 2017)

STRONG FRAMEWORK FOREIGN INVESTMENT § Non discriminatory treatment: Foreign investors receive the same treatment as local investors. § Unrestrictive access to almost all economic activities. § Free movement of capital. § Anti-trust framework and promotion of competition. § Guarantees to Private Property. § No restrictions to acquire equity from locals. § Freedom to access internal and external credit. § Access to international disputes settlement mechanism § Peru participates in the Investment Committee of the Organization for Economic Cooperation and Development (OECD) – It promotes the implementation of the Guidelines for Multinational Enterprises.

STRONG FRAMEWORK FOREIGN INVESTMENT Peru earned investment grade by practicing a responsible economic policy 3 rd in the regional ranking Investment grade Latin America benchmarking Countries Moody's S&P Fitch Aa 3 AA- A+ A 3 BBB+ Colombia Baa 2 BBB Uruguay Baa 2 BBB- Paraguay Ba 1 BB BB Brazil Ba 2 BB BB Bolivia Ba 3 BB BB- Argentina B 3 B B Ecuador B 3 B- B Caa 3 CCC Chile Peru Mexico Venezuela Continuous effort to facilitate the establishment and operation of business Source: Standard & Poor`s, Fitch Ratings and Moody´s. Updated as of July, 2017 of ease of doing business in Latin America Position Country 1 Mexico 2 Colombia 3 Peru 4 Chile 5 Panama Source: World Bank Doing Business 2017

OPEN TRADE - MARKET ACCESS POLICY An open trade policy sustained over time Evolution of nominal and effective tariff; and tariff dispersion 1993 – 2017 (*) 18, 0 16, 3 14, 0 12, 0 9 Tariff dispersion Average Nominal tariff 8 Efective tariff 7 12, 3 6 10, 0 8, 0 5 3, 4 3, 6 4 6, 0 3 4, 0 2 2, 0 1 1, 0 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* (*) As of March 2017 Source: MEF Notes: 1) Affective Tariff= (Amount of total revenue Ad valoren CIF / Total Amount of CIF Imports)*100. 2)Tariff Dispersion= Standard Deviation

OPEN TRADE - MARKET ACCESS POLICY Trade Agreements Network Agreements in force Canada Agreements signed European Union Turkey Brazil Andrean Community China Agreements under negotiation India Guatemala Venezuela El Salvador Australia Feasibility Singapore New Zealand Cuba South Korea Mexico USA Chile Costa Rica Thailand Japan Pacific Alliance Honduras Source: www. acuerdoscomerciales. gob. pe Panama Indonesia For 2025 it is expected to have 27 free trade agreements in force involving 72 partners.

EU is Peru’s second main market Exports from Peru to the world 2016 (%) Rest of the World 19% Chile 3% European Union More dynamic products China 23% (Var. % 2016/2015) Brazil 3% Japan 3% Korea 4% Canada 5% US$ 982 US$3336, 3 Millones Billion Red Cramberries United States 17% (US$ 98 million) Fresh avocados (US$ 288 million) Capsicum European Union 15% Switserland 7% (US$ 47 million) Source: CUSTOMS - SUNAT Bilateral Trade Peru – UE (by country) Exports to: 1 2 3 4 5 Country Total Spain The Netherlands Germany Belgium UK Imports from: 2016 5, 492. 2 1, 217. 3 992. 4 890. 1 622. 5 576. 5 1 2 3 4 5 Country Total Germany Italy Spain France UK 2016 4, 148. 3 1, 074. 0 711. 2 606. 5 293. 8 244. 7 142, 4% 43, 1% 25, 6%

Main Goal: To double exports by 2021 Trade Evolution (US$ FOB Million) 60 000 67, 964 50 000 46 31946 359 40 000 10 190 11 206 35 806 28 084 30 000 23 800 20 000 10 000 - 6 883 6 956 7 665 8 995 17 273 12 716 4 286 3 488 2 594 12 988 2 054 2 195 2 270 9 229 4 829 4 761 5 396 6 401 6 318 30 628 27 073 7 469 5 286 38 641 11 076 33 982 4 11 726 7 715 36, 69 6 33, 24 11 225 6 209 36 130 18 514 42 567 21 767 23 159 20 864 35 153 28 091 31 490 26 915 22 757 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fuente: SUNAT Elaboración: MINCETUR Traditional Tradicionales Non. Tradicionales Traditional No Totales 1 1

• Peru's the world leading exporter of different products 1 2 3 4 Silver & concetrates Frozen scallops Fishmeal Copper, Zinc & Lead Fresh asparagus Preserved mixtures of Natural calcium phospates. Canned artichokes vegetables Fish oil and fat Organic Coffee Quinoa Maca powder Organic cocoa Fresh avocados Fresh mangoes Precooked Giant Squid Organic Bananas Preserved asparagus Evaporated milk Preserved olives 5 Fresh grapes Frozen Giant Squid Frozen fruit & nuts Crushed or ground paprika Dried paprika Brazil nuts Fine animal hair, carded Canned anchovies Source: CUSTOMS – SUNAT 1 2

Attractive sectors to invest Food Agri-business Fishing Aquaculture Superfoods Forestry Forest Certification Afforestation and reforestation Energy Hydric Resources Natural Gas Hydrocarbon s Natural gas Oil Mining Metallic Non-metallic Add Value / connections/ Diversification Food Industry Construction Industry Petrochemical and Gas Industry Metal Industry 1 3

Agrobusiness Sector v. Natural greenhouse. v. High agricultural yields: Sugarcane (2 nd), Asparagus, Olives (3 rd), Artichokes (4 th), Grapes (6 th) and Avocado (11 th). v. Seasonal windows agricultural exports. in major markets for v. The 100, 000 hectare of land currently devoted to agricultural exports are expected to double as a result of large agricultural irrigation and expansion existing projects. v. More than US$ 5. 000 billion in exports of fresh and processed products to more than 150 countries. v. Organic, Natural, Sustainable, Direct Sourced Products with high export potential. 1 4

Tourism Sector v Important cultural destination for archaeological sites of the Inca and pre-Inca cultures. • Machu Picchu was voted one of the New 7 Wonders of the World. v Diversity of natural settings. Destination for bird and orchid watchers. v Important investment by internationally renowned hotel chains. v The conventions and gastronomic tourism has gained a significant boost. Lima is considered as one of the main sites for international meetings and has become the gastronomic capital of Latin America. v Improved connectivity, with increasing weekly frequencies in international flights to allow more connections and destinations, with more and better travel options. v Investment Opportunities in the 8 priority destinations: Northern Beaches, Amazon River, Kuelap, Moche Route, Lima, Nazca-Paracas, Colca Valley and Puno-Lake Titicaca. 1 5