IMF Staff Country Reports

The 2025 Article IV Consultation with Peru discusses that 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. The financial system is sound. Risks are tilted to the downside given elevated external uncertainty, but Peru has ample buffers to cope with shocks. 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 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, and embrace the opportunities of digital technologies and artificial intelligence.