Peru: Progress and Challenges in Economic Freedom

The 2024 Economic Freedom Index has revealed that Peru ranks 49th among the freest economies in the world, with a score of 64.8 out of 100 possible points. Despite this ranking placing the country in the top third globally, there has been a decrease of 1.7 points compared to the previous year when it held the 44th position. This data undoubtedly reflects both progress and challenges in the Peruvian economy. Peru stands out as the eighth freest country in the Americas region, out of a total of 32 nations, positioning the country as a significant player in terms of economic freedom on the continent. However, the report also highlights the challenges facing the Peruvian economy in its pursuit of greater economic freedom. Reforms implemented in recent years have been key to economic expansion and poverty reduction in Peru. The institutionalization of open market policies has promoted trade and investment, creating a conducive environment for business development. However, significant challenges persist, such as corruption and weaknesses in the rule of law, which continue to be major obstacles to long-term economic development. According to the report, political instability and social unrest have created an environment of uncertainty that negatively impacts the Peruvian economy. The perception of a deteriorating business climate in the country has led to a decline in private investment, posing a challenge to sustainable economic growth. Teodoro Crisólogo, an economist at the Peruvian Institute of Economics (IPE), emphasizes that lack of respect for concession contracts, arbitrary business closures, and reports of undue demands by authorities contribute to undermining business confidence and weakening economic freedom in the country. These factors create a less predictable business environment for attracting new investments, which in turn affects the private sector's ability to generate development opportunities and prosperity. Despite advancements in access to financing and regulatory efficiency, the Peruvian business sector still faces challenges stemming from lack of stability and legal insecurity. Labor regulations, while experiencing some flexibility, also face pressures and demands in a volatile political and social context. In conclusion, while Peru holds a prominent position in terms of economic freedom globally and regionally, it is crucial to address pending challenges such as corruption, political instability, and obstacles to doing business in order to consolidate a conducive environment for sustainable economic development and the generation of opportunities for all sectors of society.