Rhythmic Reasoning_Full Report_Final_EN - Flipbook - Page 44
RHYTHMIC REASONING | TEMPO, TIMING AND TUNING
PERU
Juan Manuel Herrera Betancourt
Guillermo Arbe Carbonel
Senior Economist, Investment Strategy
Head of Economic Research, Peru
2024
2025f
2026f
GDP Growth
3.9%
3.3%
3.1%
2.9%
Inflation
1.3%
2.4%
1.6%
2.0%
Unemployment
6.0%
6.5%
6.0%
5.8%
Budget Bal.
-3.5%
-3.8%
-2.8%
-2.3%
Latest
2024
1-yr fwd
2-yr fwd
2-yr yield
4.1%
4.4%
4.4%
5.0%
10-yr yield
6.1%
6.6%
6.7%
7.2%
Yield curve slope
1.9%
2.2%
2.3%
2.2%
Source: Scotia Wealth Management, Bloomberg Finance LP.
"Latest" values are as at September 30, 2025 and, for data other than bond yields,
pertain to the most recent monthly, quarterly, or annual reading available on
this date. GDP, inflation, and unemployment forecasts are based on Scotiabank
Economics forecasts dated September 11, 2025, budget balance forecasts
are based on median consensus estimate compiled by Bloomberg | 2024
inflation and unemployment are based on the average YoY rates for each
month of the year. | 2024 yields are as at December 31, 2024. Forward periods
are relative to September 30, 2025 and are based on forward market pricing.
KEY CONCLUSIONS
•
•
•
•
Peru’s economic strength continued in 2025, only challenged
by temporary shocks such as mine closures (and mostly
benefiting from the U.S.’s trade war), with GDP on track to
register ~3% growth in each of 2025 and 2026.
The economy is growing in a firm and sustainable fashion
with a rising trend driven by private investment and domestic
demand, while the public sector retreats somewhat to
comply with fiscal rules. The recent approval of another
round of pension funds withdrawals should also boost
personal spending into 2026.
Growth forecasts of around 3% for 2026 would be greater
were it not for slower government spending plans and
headwinds associated with the April 2026 election.
The outcome of the vote remains difficult to call, with
parties yet to define their candidates, but we think political
turbulence is at least unlikely to be worse than over the
past decade. A business-friendly presidency, in tandem
with a strong metals price backdrop, could significantly lift
investment.
and limited damage, if not benefits, from the U.S.’s trade war,
while being only slightly challenged by temporary shocks (such as
mine closures) and the now almost customary political noise. The
country is expected to remain on a firm trajectory in 2026, although
uncertainty and possible risks emanating ahead of and from April
presidential elections, as well as a scaling back of public spending
will likely prevent an acceleration in growth.
In the year to date, the economy is growing in a firm and
sustainable fashion towards a ~3% expansion with a rising trend
driven by private investment and domestic demand, while the
public sector retreats somewhat to comply with fiscal rules (Fig.
1). We expect a bit more of the same into the end of 2025, with
an extra tailwind of a recently-approved eight round of pension
withdrawals that should boost household spending over the next
few quarters. Consumption and investment strength has taken
domestic demand growth to 6.2% in 1H25, its best ex-pandemic
pace since 2013.
Fig. 1: Strong domestic drivers are behind Peruvian GDP growth
Contribution to % YoY GDP growth
Latest
9%
6%
3%
0%
-3%
-6%
2023
2024
2025
Private consumption
Investment
Government consumption
Inventories/other
Net trade
Real GDP growth
Source: BCRP, Scotia Wealth Management
With data to July, Peruvian GDP has expanded by 3.4% y/y in
the year-to-date (YTD), accelerating from 2.8% this time last year.
From a sectoral standpoint, Peru continues to see strong gains in
the construction sector—centred on residential, self-edification,
and public works—alongside firm growth in retail and wholesale
trade -due to an improvement in formal employment and lower
inflation- and strength in agricultural and mining output and
manufacturing—though non-primary manufacturing remains a
sectoral laggard. Regarding mining, a temporary closure of the
Peru’s macroeconomic fortunes have continued in 2025, with
strong growth, subdued inflation alongside monetary policy calm,
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