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COUNTRY INSIGHTS

Political risks rise; growth forecast trimmed; fiscal deficit cut to 2.5% of GDP; Central Bank bends toward global risks
PERU · Report · 18 Mar 2025

In this forecast report we cover three topics. First, we discuss the political situation, and argue that risks will rise starting on April 12th, when the 2026 electoral campaign begins. During this period, President Dina Boluarte will become vulnerable to impeachment, and we project the odds of i...

Election campaign heats up; economy grew 3.2% in 2024; new finance minister appointed; BCRP extends pause
PERU · Report · 18 Feb 2025 · 1 response

In this report, we discuss indications that the election campaign will be brought forward; improved economic performance, resulting in real GDP advancing 4.9% in December and 3.3% in full-year 2024; the appointment of José Salardi as Economy and Finance Minister; and the decision by the BCRP’s Bo...

Perú: Cabinet Reshuffle
PERU · In Brief · 01 Feb 2025 · 1 response

Last night, President Boluarte reshuffled her Cabinet and changed three ministers: Minister of Finance, José Arista; Minister of Social Inclusion, Julio Demartini; and Women and Vulnerable Population, Teresa Hernández. For weeks have been rumors of a reshuffle, and most anticipated that Interior ...

2026 elections rising to the fore; economy accelerated at end-2024; BCRP to end its easing cycle
PERU · Report · 21 Jan 2025

We discuss three topics in this report. First, we argue that politics is changing gears, with the focus turning to the 2026 election campaign. Second, we discuss economic performance. We suggest that, although the economy accelerated through November, economic cooling began in December, and we ex...

Boluarte risks impeachment; growth likely to slow in 2025, with less policy stimulus
PERU · Report · 17 Dec 2024

In this forecast report, we cover three topics. First, we discuss possible political scenarios; then we discuss our 2025 forecasts for the economy, government finances and the balance of payments; and finally we discuss our market forecasts. Our forecasts generally project greater risk, partly ar...

Can Peru avoid taking sides in the U.S.-China trade war? Economy to outperform in 2024; BCRP to pause in December
PERU · Report · 26 Nov 2024

In this report, we discuss three topics. First, we analyze the impact on Peru of the developing trade war between China and the United States. Second, we discuss Peru’s better-than-expected economic growth (we have revised up our full-year 2024 real GDP growth forecast to 3.1%, but have lowered o...

Internal security to the fore; Congress approves pension reform; BCRP to pause in November
PERU · Report · 22 Oct 2024

We cover three topics in this report. First, we discuss the recent security issues challenging Congress, and President Dina Boluarte. Then we summarize and analyze the new pension fund reform published on September 24th. Finally, we discuss the decision by the Board of the Banco Central de Reserv...

Political crisis rumbles on; growth slows, CA shifts to surplus and fiscal deficit increases; we retain our yearend forecast of PEN3.9:USD1
PERU · Report · 17 Sep 2024 · 1 response

In this report, we discuss our new quarterly forecasts, which are guided by our three scenarios: base, low and high cases. On politics, we remain firm on our base case, wherein President Dina Boluarte stays in power until the end of her term in July 2026. Moreover, we have reduced the probability...

Boluarte’s bid for popularity fails; economy slows, but should grow 2.8% in 2024; BCRP likely to cut 25bp per month until December
PERU · Report · 20 Aug 2024 · 1 response

We discuss three topics in this report. We begin with President Dina Boluarte‘s recent failed attempt to boost her popularity. We next consider the June real GDP report from the Instituto Nacional de Estadística e Informática (INEI, the national statistical institute), which confirms a sharp econ...

Electioneering for 2026 starts early; economy expands into Q2 2024, and government plans for a larger fiscal deficit; we expect the BCRP to resume cuts in October
PERU · Report · 16 Jul 2024 · 1 response

In this report, we discuss three topics. We observe that the campaign program for the 2026 elections has been brought forward. We then explain that the economic rebound that started in April 2024 was sustained into Q2. Finally, we discuss the drivers of the decision by the Board of the Banco Cent...

BCRP to extend its policy pause on July 11th
PERU · In Brief · 08 Jul 2024

We have decided to call for an extended policy pause at Banco Central de Reserva del Perú's (BCRP, the central bank) Board meeting on July 11th. Although in our June report we had called for a 25bp cut, the Instituto de Estadística e Informática's (INEI, the statistical institute) June inflation ...

Congress prepares for 2026 elections; we expect the fiscal deficit to widen, and the CA to remain in surplus; Central Bank will keep cutting, but more policy pauses can’t be ruled out
PERU · Report · 18 Jun 2024

In this report, we begin by discussing politics, focusing on the high number of laws approved by Congress that will shape the 2026 presidential and congressional elections. We then summarize our forecasts on the economy. We start by discussing our base, low and high-case scenarios, followed by re...

President Boluarte under fire; real GDP to accelerate in Q2; BCRP’s easing cycle nears its end
PERU · Report · 21 May 2024

We cover three topics in this report. First, we discuss the likelihood of Congress impeaching President Dina Boluarte. Then, we evaluate Peru’s economic performance, suggesting that real GDP remained stagnant throughout Q1 2024. We expect a rebound in Q2 2024, on the back of fiscal stimulus, and ...

Boluarte government weakened further; economic recovery takes off in Q1 2024; BCRP’s 25bp cut surprises markets
PERU · Report · 16 Apr 2024

In this report we discuss recent political developments, with a focus on President Dina Boluarte; using high-frequency economic reports, we present our updated forecast, and argue that the economy rebounded in Q1 2024; and discuss the BCRP Board’s decision to cut rates by 25bp, surprising both ma...

Peru: pension funds withdrawal to be approved on Thursday
PERU · In Brief · 09 Apr 2024 · 1 response

As expected, today Congress scheduled the vote on the pension funds withdrawal bill at its Thursday congressional plenary. The bill calls for pension funds’ contributors to be able to withdraw up to four Unidades Impositivas Tributarias (UITs, or tax-inflation-indexed units). This would allow eac...

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