By Miguel de la Vega PolancoThe Peruvian economy is showing better-than-expected indicators, improving its outlook and strengthening confidence, and in 2026 it is expected to keep attracting local and international investment despite upcoming general elections.
International scrutiny of our economic performance is important to understand what we are doing well and what we need to improve to achieve greater results in reducing poverty and moving towards becoming a developed country.
In this regard, Renzo Merino, Vice President and Senior Credit and Sovereign Risk Officer at Moody’s Ratings, one of the world’s leading credit rating agencies, points out the country’s progress and challenges.
“We expect the economy to expand by 3.3% this year. Throughout 2025, we have observed very favorable dynamics in both domestic demand and the external sector. Thanks to the creation of more formal employment, in addition to the increase in real wages, there has been greater demand for credit, supporting consumption while household balance sheets have strengthened,” he told the official newspaper El Peruano.
“Investor confidence has remained optimistic and, together with greater demand for imported capital goods, will support a continued expansion of investment in the country,” he added.
On the external front, he explains that Peru shows favorable terms of trade – the balance between the prices of the country's exports and imports – and strong demand for Peruvian exports, both traditional and non-traditional.
These improved terms of trade continue to support the growth of the Gross Domestic Product (GDP) and the country's current account surplus, Merino emphasizes.
Outlook to 2026
Regarding the growth outlook for the Peruvian economy in 2026, he anticipates that foreign trade will continue to be positive for the country.
“For 2026, we forecast a GDP growth rate of around 3%. Given the global context, we expect the terms of trade to remain favorable. This would incentivize investment in the country, even though investment tends to slow down during election periods,” he stated.
Likewise, regarding the internal and external factors that will have the greatest impact on the Peruvian economy in 2026, Renzo Merino emphasizes that local variables related to the elections will be the most significant, although he highlights the strength of domestic demand.
“With the elections taking place in 2026, internal factors will likely have a greater impact on economic activity. Domestic demand has demonstrated significant resilience in a context of political volatility in 2025,” he notes. “If, as we approach the elections, the probability of an anti-establishment candidate emerging remains low, that could help make consumption and investment dynamics more robust in the first half of the year,” he adds.
He also emphasizes that the election results will be highly relevant to the extent that they foreshadow greater stability in the political system in the coming years and that the new administration supports the country's macroeconomic stability and fosters a more favorable environment for investment.
“If these conditions are met, next year's economic growth could be higher than we currently expect,” the Moody's analyst underlines.
Economic Agenda for 2026
Regarding the economic agenda that the next government will face in order to continue growing and reducing poverty, Renzo Merino emphasizes fiscal discipline.
“We expect the next government to maintain the fiscal discipline that has characterized Peru, which is a very important support for the government's financial soundness and its credit profile,” he states.
“To the extent that there is greater political stability and policies that support private investment are promoted, economic growth should remain robust and the country can take advantage of favorable external conditions,” he adds.
He also emphasizes that the next government must strengthen political institutions and governance in order to address one of the main weaknesses in Peru’s sovereign credit profile.
“Addressing issues such as insecurity will be important because of the economic cost this situation entails, in addition to the negative effect that crime has on the well-being of the population,” he stresses.
“Furthermore, greater progress could be made in poverty reduction and human development if other structural issues are addressed, such as high levels of informality, low productivity and quality of education, and unequal regional development,” he emphasizes.
Credit Rating Outlook
Regarding the current situation and outlook for Peru's rating, the Moody's analyst explains the fundamentals of the investment grade held by our country.
"Peru's sovereign rating is currently at the Baa1 level, three notches within what is known as investment grade, with a stable outlook. It has the same rating as countries like Bulgaria, Kazakhstan, Thailand, and Uruguay," he notes.
"This rating is supported by the government's solid financial position, a robust fiscal framework, and a consistent track record of macroeconomic stability. These strengths are affected by persistent challenges due to weak political institutions," he elaborates.
Furthermore, he comments that a more stable political environment that supports institutional cohesion and leads to the adoption of sustainable reforms that boost growth, improve fiscal performance, and lead to better debt dynamics would lead to an improvement in Peru's sovereign rating.
“Strengthening governance, particularly regarding political institutions, corruption, and the informal economy, would improve sovereign creditworthiness,” he points out.
Business Confidence
The improved growth expectations for the Peruvian economy are reflected in the outlook of business leaders. The Central Reserve Bank of Peru's survey, included in its latest Inflation Report for this year, indicates: “business expectations regarding the economy and their sector have remained optimistic since mid-2024, with most indicators showing increases throughout the year.”
This also translates into better performance in private investment and improved expectations for 2026. Thus, last November, business confidence regarding the economy for the next three months stood at 58.2 points, and for the next 12 months at 63.9 points.
Regarding expectations for the sector, the 3-month outlook stood at 58.3 points and the 12-month outlook at 66.2 points; all these results are in the optimistic range (above 50 points on a scale of 1 to 100) and with an upward trend.
In this sense, expectations for private investment continue to improve, according to the Central Reserve Bank of Peru, which forecasts 9.5% growth by the end of this year.
“For 2026 and 2027, growth of 5% is projected, accumulating three consecutive years of private investment growth exceeding GDP growth,” the issuing entity details.
The Central Bank also indicates that, taking into account the latest market projections, the Peruvian economy will be one of the fastest growing in the region in 2025 and 2026. Thus, Peru's GDP is projected to reach 3.3% in 2025 and 3% in 2026, above the Latin American regional average of 2.2% in 2025 and 2.1% in 2026.
Figures:
• Peruvian exports is expected to reach US$85 billion by the end of 2025, an "unprecedented figure" for the country, according to the Ministry of Foreign Trade and Tourism (Mincetur).
• Between January and October 2025, Peruvian exports totaled US$ 71.8 billion, a 20% increase compared to the same period in 2024.
• The Ministry of Energy and Mines (Minem) anticipates facilitating US$ 11.9 billion in private investment in its sector for the period 2025-2028.
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Publicado: 29/12/2025