Peru

Peru is a country of rich cultural, geographic, and natural diversity. With landscapes ranging from the Andes to the Amazon, world-renowned cuisine, and a millennia-old history, the country combines a unique heritage with an economic dynamism that positions it as one of the most attractive economies in the region.

In recent decades, Peru made significant progress in economic and social development. Poverty fell from 60 percent in 2002 to 24 percent in 2013, and GDP per capita grew from approximately US$2,100 in 2003 to over US$8,400 in 2024. This performance was underpinned by prudent macroeconomic policies, which translated into low inflation, manageable public debt, and a sound financial system.

Nevertheless, significant challenges persist. Economic growth moderated from an average of 6.2 percent between 2005 and 2014 to 2.4 percent between 2015 and 2024. Low productivity, informality, regional gaps, institutional weakness, and rising citizen insecurity remain structural obstacles that continue to limit the country's potential.

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Peru has the potential to become a high-income country within two decades if bold reforms are implemented. Under current conditions, however, this goal remains distant. Key reforms should focus on increasing firm productivity, strengthening institutional capacity, and reducing regional disparities.

To enhance firm productivity, priority should be given to removing barriers that hinder the growth of medium-sized businesses. Strengthening institutional capacity requires establishing a competitive civil service, attracting talent through merit-based processes, and simplifying administrative procedures. Addressing regional disparities calls for reforming the public investment system to ensure projects are completed effectively and deliver tangible benefits to citizens.

Peru's macroeconomic environment remains stable. The fiscal deficit narrowed from 3.5 percent of GDP in 2024 to 2.2 percent in 2025, meeting the fiscal rule target, with a further reduction to 1.9 percent projected for 2026. Public debt edged down to 30.2 percent of GDP in 2025 and is expected to remain broadly stable. Inflation stood at 1.5 percent in 2025 and is projected at 3 percent in 2026, remaining within the central bank's 1–3 percent target range.

The economy grew by 3.4 percent in 2025, driven by strong private investment and consumption, and is projected to expand by 3.1 percent in 2026. Poverty, measured at US$8.30 per person per day (2021 PPP), stood at 36.2 percent in 2024 and is expected to decline to 34.6 percent in 2025 and 33.4 percent in 2026, as labor market dynamism supports household incomes.

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With bold reforms that bridge territorial gaps and strengthen institutional effectiveness, especially in public investment management, Peru could achieve sustainable and inclusive development and could become a high-income country within two decades.

The World Bank Group's Country Partnership Framework with Peru (2023–2027) promotes inclusive and sustainable development. The focus is on raising productivity, fostering greater public and private investment, improving public and social protection services, reducing territorial gaps, and increasing resilience to climate crises.

The active portfolio of the International Bank for Reconstruction and Development (IBRD) amounts to US$3.34 billion, comprising 16 investment projects and three development policy operations. These programs and initiatives support the country in expanding economic opportunities for job creation, improving public services nationwide, and strengthening resilience to various crises. The aim is to support resilient and inclusive growth in Peru, raise its productivity and institutional capacity, and reduce regional disparities.

The International Finance Corporation (IFC) has an investment portfolio in Peru of about US$ 1 Bn (including US$92 million in third-party mobilization), with commitments to 12 financial and non-financial institutions. The financial sector comprises 79% of the portfolio, while infrastructure accounts for 21%. Recent notable transactions include: US$50 million to Celsia SA for renewable energy generation, US$260 million to BBVA Continental for green building finance, US$100 million to MiBanco for financing small and medium-sized enterprises (SMEs) with a focus on women-owned businesses, and US$25 million to Grupo Ransa for decarbonization efforts.

As of April 2026, the Multilateral Investment Guarantee Agency (MIGA) had an exposure of US$1.342 billion (US$ 1,342 million) across four projects in Peru’s financial sector, making it MIGA’s fifth largest exposure in Latin America and the ninth largest globally. Since July 2024, MIGA has issued two guarantees covering the mandatory reserves of Banco Santander Peru (US$403 million) and Banco BBVA Peru (US$300 million), with part of this supporting climate finance initiatives and lending to MSMEs and women-owned MSMEs.

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