Peru: Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Peru

This paper discusses Peru’s Review under the Flexible Credit Line (FCL) Arrangement. Peru continues to qualify for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks, and sustained record of accomplishment of implementing very strong macroeconomic policies that have helped the country absorb large adverse shocks in recent years. Following a strong post-pandemic rebound, economic activity slowed down in 2022 and is expected to remain subdued in 2023, with inflation gradually declining to the target range by year-end. The Peruvian authorities have reiterated their intention to continue to treat the arrangement as precautionary. The authorities intend to exit the arrangement conditional on the reduction of external risks, in line with their strategy that sees the use of the facility as temporary. Given the still elevated global risks and increased uncertainty, the authorities have expressed a desire to maintain the current level of access. The authorities intend to continue to treat the arrangement as precautionary. In line with the strategy delineated at the time of the FCL approval, exit from the arrangement will be conditional on the evolution of external risks.