Peru: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Peru

The 2026 Article IV Consultation discusses that Peru is benefiting from its most favorable terms of trade since the 1950s, driven by high metal prices, which have buoyed domestic demand and strengthened the fiscal and external positions. Political uncertainty and recent energy price shocks have posed challenges, yet robust macroeconomic policy frameworks have maintained market confidence, reduced financial volatility, and ensured favorable market access. Elevated metal prices continue to support a positive economic outlook. With the output gap closed and domestic demand facing headwinds from the electoral cycle and higher energy costs, economic growth is expected to moderate slightly while inflation temporarily exceeds the upper limit of the target range in 2026. Achieving fiscal targets and addressing the structural fiscal deficit will require reforms to reduce spending rigidities and improve expenditure efficiency. Additional revenue measures are essential to bridge persistent infrastructure and social development gaps. Long-term growth depends on removing structural barriers that constrain productivity and potential output. Furthermore, a coordinated policy response is necessary to curb the rapid expansion of illegal mining and promote a stable, investment-friendly economic environment.