Peru: 2025 Article IV Consultation-Press Release; and Staff Report
IMF Staff Country Reports, June 10, 2025
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- Peru: 2025 Article IV Consultation-Press Release; and Staff Report
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Bibliographic details
- Published: June 10, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229013628.002
Macroeconomic outlook
- After a strong recovery in 2024, growth is expected to moderate in 2025, amid global and election-related uncertainty, and thereafter to remain close to potential.
- Inflation is expected to remain close to the midpoint of the target band.
- Risks are tilted to the downside given elevated external uncertainty, but Peru has ample buffers to cope with shocks.
Financial system and external position
- The financial system is sound.
- External uncertainty is elevated and represents a downside risk to the outlook.
Fiscal policy, deficit targets, and public debt
- Meeting the 2025 fiscal deficit target would require additional efforts in a pre-election year.
- In the medium term, further fiscal consolidation measures should be identified to comply with the fiscal rule deficit targets and debt ceiling.
- Introducing both spending and revenue measures would make the consolidation more balanced and credible.
Structural reforms and growth-enabling policies
- Structural reforms are urgently required to lift potential growth, including updating the fiscal decentralization framework to help boost investments in the critical mineral sector.
- Enhanced efforts are needed to:
- Curb the low but rising level of insecurity.
- Reform labor and tax regulations that impose excessive costs for formalizing or growing a business.
- Enhance the independence and integrity of judicial bodies and tools to combat corruption impunity.
- Build resilience to natural disasters.
- Embrace the opportunities of digital technologies and artificial intelligence.
Key takeaways and policy recommendations
- Short-term:
- Mobilize additional fiscal efforts to meet the 2025 fiscal deficit target despite pre-election fiscal pressures.
- Maintain monetary policy focus to keep inflation close to the midpoint of the target band.
- Medium-term:
- Design a mix of spending and revenue measures to meet fiscal rule deficit targets and the debt ceiling while preserving credibility.
- Implement structural reforms to raise potential growth, attract investment in the critical mineral sector, and reduce informality and crime-related constraints on business.
- Cross-cutting:
- Strengthen governance and judicial independence to reduce corruption impunity.
- Improve disaster resilience and adopt digital and artificial intelligence opportunities to foster productivity.
Source: Peru: 2025 Article IV Consultation-Press Release; and Staff Report (June 10, 2025).
Content in this bundle
- Economic Recovery with Lingering Political Uncertainty