Peru: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Peru

This 2023 Article IV Consultation highlights that against the background of a strong economic performance over the last quarter of a century, Peru has been hit by multiple shocks in the last several years. Adequate policies and very strong policy frameworks have made the economy resilient. Growth is expected to slow to 2.4 percent in 2023 and converge to its potential of 3 percent over the medium term. Inflation is expected to decline gradually into the target range by end-2023-early 2024. Risks to the outlook are tilted to the downside, with key risks including escalation of Russia’s war in Ukraine, an abrupt global slowdown and commodity price volatility, monetary policy miscalibration by major central banks with a possible de-anchoring of inflation expectations and systemic financial instability, an intensification of political uncertainties at home, social unrest over political developments, and natural disasters. Financial sector policies should continue to maintain a tightening bias to cement financial stability in a deteriorating financial environment. The Organization for Economic Cooperation and Development accession process should be used to define a well-articulated structural reform agenda to deal with the scarring effects of the coronavirus disease 2019 pandemic and support green and inclusive growth.