LatinNews Daily - 28 March 2025

*Following the conclusion of an Article IV mission to Peru, the International Monetary Fund (IMF) has highlighted the recovery of Peru’s economy in 2024, with GDP expanding 3.3% in 2024. Peru’s economy contracted 0.6% in 2023, due to what Peru’s central bank describes as “social unrest at the beginning of the year [following the removal of former president [2021-2022] Pedro Castillo] and climate anomalies”. In a statement, the IMF said growth in 2024 was supported by “a robust recovery in primary sectors, rising private consumption, and strong public investment”. The Fund expects growth to moderate to 2.9% in 2025, amid “global policy uncertainty and pre-electoral tensions” ahead of April 2026 general elections. The IMF also highlighted that inflation, which was running at 1.50% in annual terms in February, was “firmly within the target band” of 1-3%. While noting that international reserves remained at a “comfortable level” of about 27% of GDP, the IMF highlights in its statement that the fiscal deficit rose to 3.5% of GDP, far above the revised fiscal rule deficit target of 2.8% of GDP, due to “lower tax collection and higher public investment execution”.

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