Economic Outline

Economic Indicators

In the context of robust economic growth spanning the past 25 years, Peru has encountered numerous setbacks in recent years. After contracting by 0.6% in 2023, the economy rebounded in 2024, with inflation staying well within the target range. Growth picked up to 3.3%, driven by a strong recovery in primary sectors, increased private consumption, and robust public investment. Growth is expected to slow in 2025 due to global policy uncertainty and pre-election tensions. Real GDP growth is forecasted at 2.9%, supported by continued private consumption growth, while public investment slows. Despite high metal prices, pre-election tensions are likely to hinder the recovery of private investment. Following this, growth is expected to stabilize around its potential rate of approximately 2.5% (data IMF).

In 2024, the external current account surplus improved further to 2.2% of GDP, supported by strong terms of trade. However, the fiscal deficit rose to 3.5% of GDP, exceeding the revised fiscal rule target of 2.8% due to lower tax collection and higher public investment. International reserves remained at a comfortable level of around 27% of GDP. The recent revision of the fiscal rule raised the fiscal deficit ceiling to 2.2% of GDP in 2025 and to 1.8% of GDP in 2026, up from 1.5% and 1.0%, respectively. The medium-term baseline scenario incorporates this new consolidation path, slightly exceeding the ceiling. Income tax regularization in 2025, bolstered by higher commodity prices in 2024, and a conservative growth projection in the 2025 budget, will contribute to this consolidation. Public debt – at 34.2% in 2024, from 33% one year earlier - is expected to remain on a stable trajectory in the coming years. Official government data pointed to a reduction in inflation to 1.9% last year amid lower energy prices. Inflation expectations for the next 12 months remain within the Central Bank’s target range of 2% ±1%.

Although the unemployment rate in Peru doubled during the early stages of the pandemic, unemployment has been decreasing since then. According to the INEI, Peru’s employed population surpassed 17.3 million in 2024, up 0.8% from the previous year, while the unemployment rate reached 5.6%, with higher unemployment among women (6.6%) than men (4.7%), as well as among young people aged 14–24 (11.5%) and those with university education (7.2%). However, the informal economy continues to employ a large part of the active population (more than 70% as per the World Bank). Moreover, the country has high levels of inequality, with a significant concentration of wealth, and a poverty rate of 32.2% (upper-middle-income poverty rate of USD 6.85/day - World Bank). 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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