There are fears that the deepening crisis will have a negative impact on a Peruvian economy which had been performing relatively healthily in recent years, with low inflation.
According to gasworld’s Business Intelligence’s 2018 report on the market, in the decade between 2008 and 2018 GDP grew by an average of 4.9% when adjusted for inflation.
Telecommunications and financial services have been the main contributors to a growing Peruvian economy which still has a long way to go until it fully modernises and, therefore, a great deal of potential to be realised.
In recent years, economic activity in the country has benefitted from a favourable international context, particularly from improving terms of trade. The combination of economic modernisation, natural resource abundance and continued improvements in economic governance and political stability had been helping Peru to emerge as one of the most stable economies in Latin America.
Industrial gas growth
Against this improving backdrop, the industrial gas market in Peru has been steadily growing too, at a similar average annual growth rate of 4.5% for the decade from 2008-2018. This resulted in a Peruvian industrial gases market worth just under $170m in 2018.
The current crisis at the hands of coronavirus puts the attention squarely on the country’s healthcare sector and oxygen supply, two sectors that go hand-in-hand. Oxygen is indeed the most prominent gas in Peru by revenues, however it is to the metallurgy business that it is perhaps most closely linked.
Metallurgy is the most important end-use sector in Peru from a point of view of gas sales, accounting for almost half of the revenues in the region (46.5%) in 2018. The next two main revenue generating end-users are the refining and manufacturing industries, with market shares of 16.6% and 8%, respectively. All the other end-user markets are responsible for less than 7.5% of the industrial gas revenues in Peru, including the healthcare sector – which made up just 7.2% of industrial gas revenues (primarily oxygen) in 2018.