Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

An economic model country for the past two decades, Peru's growth peaked at an average of 6% between 2004 and 2012. Even though Peru faced economic difficulties in the past couple of years due to the pandemic, the country's economic situation has improved, with growth levels reaching an estimated 10% in 2021. The strong recovery was mainly driven by a boost in Peru’s main exports (copper, gold, silver, zinc), higher commodity prices, and rising demand from China and the US, as well as continued government support to households and businesses, which increased consumption. The Peruvian economy is expected to continue growing in the coming years, albeit at a slower pace, with the IMF predicting a GDP growth of 4.6% for 2022 and 4.5% for 2023.

Peru recorded a budget deficit of 5.3% of the GDP in 2021, but it is expected to decrease to 4.1% in 2022 and remain stable in 2023. Inflation increased to 3.2%, but the Central Bank should tighten its monetary policy to keep inflation withing the target of 2%, with the IMF forecasting inflation rates at 2.5% in 2022 and 2.3% in 2023. Furthermore, although public debt increased to 35% of GDP in 2021, mainly due to the impacts of the pandemic, Peru still has one of the lowest debt-to-GDP ratios of Latin America thanks to the prudential fiscal policy in force since the early 2000s. Additionally, the IMF anticipates the government debt to remain relatively stable in 2022 and 2023, at 36.9% and 38.5%, respectively. In order to address the situation of economic crisis related to the pandemic, the government developed a comprehensive economic relief and aid to support companies and protect vulnerable population through cash-transfer, tax payment deferrals and credit guarantees for the private sector. The fiscal stimulus package combines with the country's high vaccination rates pushed Peru to a strong recovery in 2021 - a trend that's expected to continue in 2022.

Although the unemployment rate in Peru doubled during the early stages of the pandemic, unemployment decreased in 2021, reaching 8.7%. According to IMF estimates, the country's unemployment rate is expected to return to pre-pandemic levels in 2022 and remain stable, at 6.5%, in 2023. However, the informal economy continues to employ a large part of the active population. Moreover, the country has high levels of inequality, with a significant concentration of wealth, and a poverty rate of 20.2%. About 7 million Peruvians now live in poverty, 44% of whom are in rural areas. There are serious regional disparities in poverty throughout the country, with the highest numbers being in the Andean and Amazonian regions.

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