Peru’s middle class increased from 25 percent of the total population in 2005 to nearly 60 percent due to the country’s economic expansion, the Peruvian Association of Banks (Asbanc) reported on Tuesday.
According to the financial entity, the Andean country’s economy has expanded at an average annual rate of six percent in the past ten years, which has led to a significant reduction of poverty.
“Peru’s poverty rate has fallen to about 23.9 percent of the current population, from about 50 percent in 2003 thanks to economic growth”, the entity pointed out.
Likewise, Asbanc noted that the reduction of poverty and the growth of the middle class has increased the demand for education and mobile phone services, cars, construction or purchase of homes and credit card loans.
In March, the Ministry of Economy and Finance (MEF) said that the average per-capita income in Peru increased by 36.7 percent between 2004 and 2012, “reflecting the soundness of the country’s economy in the last two decades”.
There are methodologies that define the middle class as the socio-economic levels B and C on a scale from A to E, and another that defines it as those who are not poor and not rich.
Peru’s gross domestic product has consistently seen robust growth, initially fuelled by a commodities boom and as domestic demand plays an increasingly important role. Peru’s GDP grew 6.9% in 2011, 6.3% in 2012, 5.02% in 2013. It is expected to expand by about 5.5% this year.
Peruvian President Ollanta Humala has pledged to cut the poverty rate to 15 percent before he leaves office in 2015, through social cash transfer schemes and an increase in minimum wages and pensions.