## IMF Executive Board Concludes 2024 Article IV Consultation with Peru _IMF News, May 21, 2024_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2024 Article IV Consultation with Peru](https://www.imf.org/en/news/articles/2024/05/21/pr-24172-peru-imf-executive-board-concludes-2024-art-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2024/05/21/pr-24172-peru-imf-executive-board-concludes-2024-art-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2024/05/21/pr-24172-peru-imf-executive-board-concludes-2024-art-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2024/05/21/pr-24172-peru-imf-executive-board-concludes-2024-art-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: May 21, 2024 --- ### Outlook and Macroeconomic Assessment - The Executive Board concluded the Article IV consultation on May 20, 2024. - Economic recovery context: - 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. - 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. - Growth and inflation projections: - A rebound in growth to 2.5 percent is expected in 2024. - Growth drivers: strong recovery in agriculture and fishing, continued momentum in mining, and a looser monetary policy stance. - Private consumption and private investment: only a moderate recovery expected as nominal wages gradually regain purchasing power and elevated political uncertainty weighs on confidence. - Inflation: as El Niño effects dissipate, inflation would rapidly decline towards the midpoint of the target band, aided by a negative output gap and normalization of supply shocks, with the Central Bank continuing a cautious monetary policy easing cycle. - Current account: envisaged to return to a deficit of 1.1 percent of GDP in 2024 and to stabilize at 1.5 percent of GDP in the medium term. - External financing and debt rollover risks are assessed as remaining low. ### Risks and Buffers - Evolving risks are broadly balanced; outlook remains uncertain. - Key domestic risks: - Intensification of political uncertainty. - Social unrest. - Climate-related shocks. - Key external risks: - Weak trading-partner growth. - Commodity price volatility. - Sharp tightening of global financial conditions. - Upside scenario: - A stronger recovery in confidence could support stronger private consumption and investment growth. - Macroeconomic buffers: - Relatively low public debt. - Abundant international reserves. - Access to international capital markets on favorable terms. ### Executive Board Assessment and Policy Recommendations - Executive Directors’ overall view: - Commended Peruvian authorities for sustained track record of very strong macroeconomic policies and institutional frameworks. - Noted low public debt, abundant international reserves, a robust financial sector, and favorable access to international capital markets as strong buffers. - Supported authorities’ decision to exit the Flexible Credit Line arrangement upon its expiry in May 2024 given broadly balanced risks and strength of buffers. - Noted authorities’ commitment to maintaining sound institutions and policies to strengthen resilience against external risks. - Fiscal policy: - Directors welcomed the strong fiscal position and the authorities’ commitment to fiscal sustainability. - Given available fiscal space, a more gradual fiscal consolidation path could help support growth in the short run. - Highlighted the need for ambitious revenue mobilization to support a more balanced medium‑term consolidation plan. - Called for measures to further strengthen the fiscal framework, including: - Reviewing the optimality of the medium‑term fiscal target, the debt ceiling, and liquidity buffers, supported by Fund TA. - Bolstering the effectiveness of the Fiscal Council. - Emphasized importance of pension reforms to address subpar income replacement and coverage, early withdrawals, and potential long‑term fiscal contingencies. - Monetary and financial policy: - Commended the central bank’s early decisive monetary tightening for anchoring inflation expectations and reducing inflation towards the target band. - Agreed with ongoing cautious data‑dependent monetary policy easing. - Encouraged the central bank to maintain exchange rate flexibility to act as a shock absorber and support faster economic recovery. - Noting financial system resilience, encouraged authorities to remain vigilant and continue to facilitate de‑dollarization and capital market deepening. - Structural reforms: - Stressed urgent need for structural reforms to revive growth. - Recommended focus on: - Reforming labor and tax regulations. - Building resilience to climate shocks. - Embracing the digital and artificial intelligence revolution. - Commended authorities’ commitment to addressing corruption and encouraged strengthening governance institutions. - Noted the OECD accession process provides a clear roadmap for more ambitious reforms to boost the business climate and ensure sustainable and inclusive growth. ### Key Statistics from Table 1. Peru: Selected Economic Indicators (selected items) - Social Indicators: - Poverty rate (total) 1/: 30.1 (2020), 25.9 (2021), 27.5 (2022) - Unemployment rate for Metropolitan Lima (average): 13.0 (2020), 10.7 (2021), 7.8 (2022), 6.8 (Est.), [no further breakdown in source] - Production and Prices (annual percentage change, unless otherwise indicated): - Real GDP: -10.9 (2020), 13.4 (2021), 2.7 (2022), -0.6 (2023 Est.), 2.5 (2024 Proj.), 2.3 (2025), [output gap series below] - Output gap (percent of potential GDP): -5.5 (2020), 0.9 (2021), 0.6 (2022), -1.3 (2023), -0.7 (2024), -0.2 (2025), 0.0 (2026) - Consumer prices (end of period): 2.0 (2020), 6.4 (2021), 8.5 (2022), 3.2 (2023), 2.4 (2024) - Consumer prices (period average): 1.8 (2020), 4.0 (2021), 7.9 (2022), 6.3 (2023) - Money and Credit (depository corporations; foreign currency stocks valued at end-of-period exchange rates): - Broad money: 29.2 (2020), -0.3 (2021), 1.5 (2022), 3.9 (2023), 4.7 (2024), 5.3 (2025), 5.5 (2026) - Net credit to the private sector: 14.0 (2020), 6.5 (2021), 3.6 (2022), 0.4 (2023), 4.8 (2024), 5.1 (2025) - Credit-to-private-sector/GDP ratio (%): 52.4 (2020), 45.9 (2021), 44.4 (2022), 41.8 (2023), 41.4 (2024), 41.6 (2025), 42.0 (2026), 42.5 (2027), 43.0 (2028), [series continues in table] - External Sector: - Exports: -10.7 (2020), 47.0 (2021), 5.2 (2022), -0.8 (2023), 3.1 (2024), 3.4 (2025), 3.5 (2026) - Imports: -15.5 (2020), 38.2 (2021), 16.5 (2022), -10.8 (2023), 4.3 (2024), 3.3 (2025) - External current account balance (percent of GDP): 1.1 (2020), -2.2 (2021), -4.0 (2022), -1.1 (2023), -1.4 (2024), -1.5 (2025) - Gross reserves in billions of U.S. dollars: 74.9 (2020), 78.5 (2021), 72.2 (2022), 71.3 (2023), 73.8 (2024), 76.3 (2025), 78.4 (2026), 80.8 (2027), 82.7 (2028), 84.4 (2029) - Percent of short-term external debt 4/: 495 (2020), 583 (2021), 530 (2022), 409 (2023), 459 (2024), 438 (2025), 430 (2026), 483 (2027), 493 (2028) - Public Sector (in percent of GDP unless otherwise indicated): - NFPS revenue: 21.8 (2020), 25.5 (2021), 26.9 (2022), 23.9 (2023), 23.8 (2024), 23.6 (2025), 23.7 (2026) - NFPS primary expenditure: 29.1 (2020), 26.5 (2021), 27.0 (2022), 25.0 (2023), 24.7 (2024), 24.1 (2025), 22.9 (2026), 23.0 (2027), 23.2 (2028) - NFPS primary balance: -7.3 (2020), -1.0 (2021), -0.1 (2022), 0.2 (2023), 0.7 (2024) - NFPS overall balance: -8.9 (2020), -2.5 (2021), -1.7 (2022), -2.8 (2023), -2.0 (2024) - NFPS structural balance 5/: -7.0 (2020), -1.8 (2021), -1.2 (2022) - NFPS structural primary balance 5/: -5.4 (2020), -0.9 (2021), -0.5 (2022), 0.5 (2023) - Debt: - Total external debt 6/: 43.7 (2020), 46.3 (2021), 40.6 (2022), 37.0 (2023), 35.5 (2024), 33.6 (2025), 32.7 (2026), 31.8 (2027) - Gross non-financial public sector debt 7/: 34.9 (2020), 36.1 (2021), 33.9 (2022), 32.1 (2023), 33.0 (2024), 33.3 (2025), 33.2 (2026), 32.6 (2027), 31.6 (2028) - External vs Domestic composition (percent of GDP): External 14.8 (2020), 19.4 (2021), 17.5 (2022), 16.0 (2023), 15.3 (2024), 14.2 (2025), 13.1 (2026), 11.5 (2027), 10.9 (2028), 10.3 (2029); Domestic 20.1 (2020), 16.7 (2021), 16.4 (2022), 16.1 (2023), 17.8 (2024), 19.0 (2025), 21.1 (2026), 21.3 (2027), 21.4 (2028) - Savings and Investment: - Gross domestic investment: 19.9 (2020), 21.7 (2021), 22.1 (2022), 19.2 (2023), 20.4 (2024), 20.8 (2025), 20.9 (2026), 21.5 (2027) - Public sector (incl. repayment certificates): 5.0 (2020), 4.9 (2021) - Private sector: 16.8 (2020), 20.2 (2021), 17.9 (2022), 17.7 (2023), 17.4 (2024), 17.2 (2025), 16.9 (2026), 16.6 (2027) - National savings: 21.0 (2020), 19.5 (2021), 18.1 (2022), 19.8 (2023), 19.3 (2024), 19.7 (2025), 20.0 (2026) - Memorandum Items: - Nominal GDP (S/. billion): 721 (2020), 878 (2021), 939 (2022), 1,002 (2023), 1,051 (2024), 1,102 (2025), 1,151 (2026), 1,202 (2027), 1,255 (2028), 1,309 (2029) - GDP per capita (in US$): 6,320 (2020), 6,848 (2021), 7,336 (2022), 7,933 (2023), 8,291 (2024), 8,567 (2025), 8,839 (2026), 9,115 (2027), 9,397 (2028), 9,685 (2029) *Press Release No. 24/172, May 21, 2024 — IMF Communications Department.* --- ## References - [Peru and the IMF](http://www.imf.org/external/country/PER/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2024/05/21/pr-24172-peru-imf-executive-board-concludes-2024-art-iv-consultation_