IMF Staff Country Reports

The 2024 Article IV Consultation with Peru discusses that the economy is recovering from consecutive climate-related shocks and social turmoil at the beginning of 2023. Inflation has receded thanks to the central bank’s decisive monetary policy tightening, while the fiscal position and the financial system remain strong. The country is in a period of relative political stability, but lingering political uncertainty is denting the appetite for pressing reforms to boost potential growth. Evolving risks are broadly balanced, and Peru has ample buffers to cope with adverse shocks, although the outlook remains uncertain. In the short term, key domestic risks include an intensification of political uncertainty, social unrest, and climate-related shocks. Key external risks comprise weak trading-partner growth, commodity price volatility, and a sharp tightening of global financial conditions. On the upside, a stronger recovery in confidence could support stronger private consumption and investment growth. Strong buffers including relatively low public debt, abundant international reserves, and access to international capital markets on favorable terms reinforce Peru’s proven macroeconomic resilience.