Peru Central Bank Cuts 2026 Growth Forecast to 3.2 Percent
Peru's central bank revised its 2026 GDP growth projection downward to 3.2 percent. The adjustment reflects the adverse economic effects of the El Niño weather phenomenon.
The 2026 GDP growth forecast was lowered to 3.2 percent. This figure is down from the previous estimate of 3.4 percent. Central bank chief Julio Velarde announced the change on Friday. The revision attributes the slowdown to the El Niño weather event.
The bank also updated its inflation outlook. The 2026 inflation forecast was raised to 4.2 percent. This is an increase from the prior projection of 3.8 percent. The 2027 GDP growth projection stands at 3.0 percent.
Fiscal deficit projections improve
The quarterly report details the fiscal deficit outlook. The 2026 fiscal deficit is now projected at 1.5 percent of GDP. This represents an improvement from the previous estimate of 1.8 percent. The 2027 fiscal deficit is also projected at 1.5 percent of GDP.
El Niño impacts key sectors
El Niño is currently affecting specific economic activities. The fishing and agricultural sectors face direct pressure. These impacts pose a risk to fishmeal and fruit exports. Both sectors have been strong growth drivers in recent years. Peru remains the world's third-largest copper producer.
Rate hike possibility remains
Velarde identified the mining sector as a source of potential. He noted the sector holds significant economic value. An interest rate hike in coming months is not ruled out. The central bank seeks the opportune moment to cut rates. This information was reported by GN markets/growth (en-US).
