Peru: Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Peru

IMF Staff Country Reports, May 19, 2023

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Canonical URL: Peru: Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Peru

Peru continues to qualify for the Flexible Credit Line (FCL) by virtue of its "very strong economic fundamentals and institutional policy frameworks" and a "sustained record of accomplishment of implementing very strong macroeconomic policies" that helped absorb large adverse shocks in recent years.
The Peruvian authorities have reiterated their intention to continue to treat the arrangement as precautionary.
Exit from the arrangement will be conditional on the reduction of external risks, in line with the strategy delineated at the time of the FCL approval.

Following a strong post-pandemic rebound, economic activity slowed down in 2022 and is expected to remain subdued in 2023.
Inflation is expected to gradually decline to the target range by year-end 2023.

Given still elevated global risks and increased uncertainty, the authorities have expressed a desire to maintain the current level of access under the FCL.
The authorities intend to continue to treat the arrangement as precautionary and to exit the arrangement conditional on the evolution and reduction of external risks.

Subject: Credit; Economic sectors; External debt; Inflation; International organization; Monetary policy; Money; Prices; Public debt; Public sector
Keywords: Caribbean; Credit; expectations indicator; FCL arrangement; FX intervention; Global; implementation warrant; Inflation; inflation expectation; policy stimulus; Public sector