Published on Thursday, June 18, 2026

Peru Economic Outlook – June 2026

Summary

The Peruvian economy grew 3,5 % in the first quarter, above expectations, backed by private spending. The Middle East conflict, weather anomalies, and the election result will shape its performance going forward. In the baseline scenario, it will grow 3,1 % in 2026 and 3,5 % in 2027, once supply shocks fade away.

Key points

Key points:
Although the Middle East conflict has lasted longer than initially expected, the international environment remains positive for Peru, among other factors due to the AI boom. In this context, terms of trade remain at high levels and will continue to do so this year and next.
Locally, domestic demand is strong, particularly private spending. Assuming that the incoming government administration will promote a business-friendly environment, GDP growth in 2026 is expected to reach 3,1 %, two tenths of a percentage point above our March forecast.
The fiscal deficit fell to 2,1 % of GDP in the first quarter and the Central Bank’s preliminary estimate places it at 1,6 % in May. The expected increase in current spending makes any further decline difficult. We expect it to end 2026 at 2,1 % and 2027 at 1,9 %. As a result, gross public debt will remain at around 30 % of GDP over the next couple of years.
The Middle East conflict and the electoral process have driven up exchange-rate volatility. The impact of these two events should tend to dissipate going forward and the domestic currency will strengthen, supported by the external accounts surplus and by what is assumed to be a market-friendly incoming government. The exchange rate will end 2026 and 2027 in a range of 3,20 to 3,30 soles per dollar.
With the increase in world oil prices, domestic inflation accelerated, exceeding the Central Bank’s target range. Inflation expectations also rose. Although there have been no major second-round effects, we expect inflation to remain above the target range for several months. It is therefore difficult to rule out monetary policy rate hikes in the second half of the year, before returning to normal conditions in 2027.