IMF Executive Board Concludes 2026 Article IV Consultation with Peru
IMF News, May 18, 2026
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- Published: May 18, 2026
Overview and recent performance
- The Executive Board concluded the Article IV consultation with Peru on May 15, 2026.
- Record-high terms of trade (TOT) supported strong economic growth in 2025, bringing output close to potential.
- Employment, income, and consumer confidence improved in 2025, boosting private consumption.
- Private investment rose strongly in 2025, supported by metal prices and progress with infrastructure projects.
- The BCRP continued monetary policy normalization in 2025, with inflation expectations firmly anchored and inflation around the midpoint of the target band.
- The current account surplus grew to 3.1 percent of GDP in 2025.
- The fiscal deficit narrowed to 2.2 percent of GDP in 2025, meeting the fiscal rule’s target but remaining high in structural terms.
2026 outlook, projections, and transmission channels
- Growth is projected at 2.8 percent in 2026, assuming limited effects from a short-lived Middle East conflict.
- A strong labor market and rising real incomes should support private consumption despite some electoral period challenges.
- Favorable metal prices are likely to boost potential growth and support private investment.
- Credit growth is set to recover moderately.
- Higher energy costs will mainly impact transportation and food, temporarily pushing inflation above the upper limit of the target range.
- The current account is expected to stay in surplus in 2026 before gradually moving to a deficit, reflecting normalizing terms of trade and rising private investment.
- The fiscal deficit is projected to reach 2 percent of GDP in 2026, remaining above fiscal targets in the medium term.
- Public debt would stabilize around 32 percent of GDP.
Balance of risks
- Downside risks predominate; key domestic risks include:
- Political uncertainty
- Social unrest
- Weather-related events
- Ongoing insecurity and illegal mining, which may hinder medium-term growth
- External risks include:
- Spillovers from a protracted Middle East conflict
- Potential upside inflation pressures
- Regional geopolitical tensions
- Protectionism and trade disruptions
- Commodity price volatility
- A disorderly AI correction in financial markets
- Prolonged policy uncertainty
- Upside scenarios:
- Growth could exceed expectations if high metal prices boost private investment
- Greater political stability after the elections that enables progress on structural reforms
- Macro buffers strengthening resilience:
- Low public debt
- Abundant international reserves
- Access to international capital markets on favorable terms
Executive Board assessment and policy recommendations
- Directors welcomed the robust growth in 2025 and Peru’s very strong macroeconomic and institutional policy frameworks.
- They noted the balance of risks remains tilted to the downside and underscored the importance of continued prudent policies and accelerated structural reforms to boost potential growth and productivity while supporting inclusive and sustainable growth.
- Fiscal policy:
- Directors welcomed the authorities’ commitment to preserving fiscal sustainability.
- Emphasized need for fiscal consolidation to achieve fiscal targets while creating space for productive public investment and targeted intervention if the global energy crisis escalates.
- Encouraged addressing rising spending rigidities, particularly from wage and pension pressures.
- Measures to improve the quality and efficiency of public procurement and investment are important.
- Agreed on the need for revenue reforms to help close infrastructure and social gaps.
- Encouraged close monitoring of risks arising from recent reforms to the public‑private partnership framework and pension system.
- Monetary and exchange rate policy:
- Highlighted that the inflation targeting framework has helped maintain low inflation and anchor expectations.
- Agreed that a broadly neutral monetary policy stance remains appropriate.
- In the context of multiple supply shocks and elevated uncertainty, stressed the need for vigilance and a data‑dependent monetary policy.
- The flexible exchange rate should continue to act as a shock absorber.
- Financial sector and capital markets:
- Welcomed Peru’s financial sector resilience and progress on regulatory reforms.
- Underscored importance of promoting financial deepening, reviving credit growth, and implementing remaining FSAP recommendations.
- Stressed that further private pension withdrawals should be avoided to safeguard domestic capital markets.
- Structural and governance priorities:
- Encouraged leveraging favorable terms of trade to accelerate structural reforms.
- Emphasized need for a coordinated policy response to address illegal mining, with implications for governance, security, and financial integrity.
- Encouraged updating the fiscal decentralization framework, incentivizing formalization, and enhancing productivity.
- Recommended further integrating climate‑related risks into macroeconomic planning and public investment decisions.
Selected key indicators and projections (as reported)
- Growth and labor:
- Real GDP growth: 2023: -0.4; 2024: 3.5; 2025: 3.4; 2026: 2.8 (percent, annual)
- Output gap (percent of potential GDP): 2023: -1.5; 2024: -0.7; 2025: 0.0
- Unemployment rate for Metropolitan Lima (average): 2024: 6.4; 2025: 5.9; 2026: 6.3; 2027: 6.5
- Prices and money:
- Consumer prices (end of period): 2023: 2.0; 2024: 2.5
- Consumer prices (period average): 2023: 2.4; 2024: 1.8
- Broad money (annual % change): 2025: 8.0; 2026: 7.3; 2027: 6.6; 2028: 5.6
- Net credit to the private sector (annual % change): 2025: 7.4; 2026: 7.1; 2027: 7.0; 2028: 6.9
- Credit-to-private-sector/GDP ratio (%): 2024: 37.9; 2025: 36.1; 2026: 35.4; 2027: 37.0; 2028: 38.8
- External sector:
- Exports (annual % change): 2024: 13.8; 2025: 21.8; 2026: 18.6
- Imports (annual % change): 2024: 4.3; 2025: 12.3; 2026: 12.2
- External current account balance (percent of GDP): 2023: 0.3; 2024: 2.2; 2025: 3.1; 2026: 0.2; 2027: -0.8
- Gross reserves (billions of U.S. dollars): 2024: 79.2; 2025: 90.3; 2026: 100.1; 2027: 105.1; 2028: 107.5
- Gross reserves (Percent of short-term external debt): 2024: 436; 2025: 540; 2026: 642; 2027: 638; 2028: 737
- Fiscal and debt indicators (percent of GDP):
- NFPS revenue: 2024: 22.3; 2025: 22.6; 2026: 22.5; 2027: 22.4
- NFPS primary expenditure: 2024: 24.0; 2025: 23.1; 2026: 22.9; 2027: 22.8
- NFPS overall balance: 2024: -3.5; 2025: -2.2; 2026: -2.0; 2027: -1.9; 2028: -1.6
- NFPS structural balance (adjusted): 2025: -2.9 (percent of GDP)
- Gross non-financial public sector debt: 2024: 32.1; 2025: 30.2; 2026: 30.0; 2027: 30.9; 2028: 31.6; 2029: 32.2
- External share of gross public debt: 2024: 15.2; 2025: 12.9; 2026: 12.8; 2027: 12.5
- Domestic share of gross public debt: 2024: 17.2; 2025: 18.5; 2026: 19.5; 2027: 20.5
- Savings and investment (percent of GDP):
- Gross domestic investment: 2024: 20.2; 2025: 20.4; 2026: 20.8; 2027: 21.7; 2028: 22.2
- National savings: 2024: 23.4; 2025: 23.8; 2026: 23.3; 2027: 21.6
Source: IMF Communications Department — Press Release No. 26/157 (IMF Executive Board conclusion of 2026 Article IV consultation with Peru, May 18, 2026).