Following the election results, the Peruvian economy is entering a phase of greater private-sector dynamism, bolstered by high prices for its mineral exports, projects Patricio Vimberg, Associate Director, S&P Global Ratings, in an exclusive interview with Official Gazette El Peruano.
1. What is the outlook for the Peruvian economy after Keiko Fujimori's victory in the presidential runoff election?
Our 'BBB-' investment-grade sovereign credit ratings on Peru and its stable outlook incorporate the country's long-standing prudent macroeconomic policies, despite political instability, with Keiko Fujimori becoming the ninth president in the past 10 years.
Fujimori's narrow victory in the presidential runoff, lower political fragmentation in the Lower House and the reinstitution of the Senate could reduce political uncertainty by blocking Congressional attempts to remove presidents from office.
Following the elections, we project resilient household consumption and private investment, particularly in mining. However, higher energy prices and El Niño-related risks, may soften domestic demand temporarily.
2. Following Julio Velarde's appointment as head of the Central Reserve Bank of Peru, what will be his impact on the Peruvian economy?
Peru has established a strong track record of monetary policy credibility.
Despite episodes of political turmoil, effective management by key economic institutions, such as the Central Bank, has been instrumental in preserving economic stability and investor confidence.
Moving forward, we expect continued prudent policies by the Central Bank to keep inflation expectations anchored within the target of 1%-3%.
3. Will the cycle of high mineral prices continue? To what extent will this benefit Peru, and to what extent will it offset a potential impact of El Niño on the Peruvian economy?
At S&P Global Ratings, we expect copper prices to remain elevated driven by robust global demand for electrification and the infrastructure requirements for AI development.
Furthermore, gold prices have risen due to heightened global geopolitical and macroeconomic uncertainty.
Peru is well positioned to benefit from these trends, as metal mining exports account for 64% of its total exports (with copper and gold accounting for 30% and 24% of goods exports, respectively).
However, these gains may be partially offset by climate risks. A more severe El Niño event could strain Peru's external position and raise inflation, through both inland drought and coastal flooding damaging infrastructure and affecting fishing and agricultural exports.
4. How do you view compliance with fiscal rules in Peru? What factors will contribute to achieving this, and what are the risks?
Despite recurrent political uncertainty, Peruvian governments have maintained strong fiscal consolidation efforts, keeping relatively low fiscal deficits and one of the lowest debt levels in the region. In S&P view, we focus on actual fiscal outcomes rather than adherence to a specific rule, which is subject to revisions and might vary from country to country.
The main risks to further fiscal consolidation include political demands in Congress to boost spending, the need for emergency funds to address El Niño climate events, and the further materialization of contingent liabilities.
5. Will Peru continue to have one of the highest growth rates in Latin America?
We project Peru's economy will grow at 2.7% in 2026 and around 3%, on average, over the next 3 years, reflecting a moderate recovery. This is somewhat higher than the Latin American average, although the region as a whole has suffered from long-standing subdued economic growth.
It is important to note that political instability in Peru has precluded faster economic growth. During the previous favorable commodity cycle, Peru grew 5%-6% per year, which compares to the current 3% rate, even with record-high copper prices and production.
Political developments, including unstable leadership with rapid turnover in the presidency, have also hindered policies aiming to rebuild important buffers that Peru lost during the pandemic years and afterwards, such as large savings held in private sector pension funds and in government coffers.
This led us to lower our long-term foreign currency rating on Peru by two notches since 2021, to 'BBB-' currently from 'BBB+'.
6. What measures should the next government take to consolidate and improve Peru's investment-grade rating?
Our stable outlook on the rating is based on economic growth of around 3% annually over the next two years and a gradual fiscal consolidation, despite spending pressures. We expect monetary policy credibility and the country's strong external position to remain key rating strengths.
We could raise the ratings if more stable political conditions support effective policy execution that boosts investment and economic growth prospects.
Also, further reducing the country's net external debt or strengthening the debt profile could lead to an upgrade. Conversely, we could lower the ratings if there is a pronounced shift in economic policy that weakens investor sentiment and growth prospects.
Lower growth could, in turn, put additional pressure on fiscal deficits and accelerate an increase in the debt burden.
Publicado: 16/7/2026