“Over the last few quarters, Peru’s economy has been driven by mining, manufacturing, construction, and the service industries. In early 2024, we have seen services, including transport, storage, mail and courier sector, trade and business services begin to recover, and we expect these sectors to hold up over 2025,” says Julia Sinitsky, Peru country-risk analyst at BMI-Fitch Solutions.

Monthly data released through August supports BMI’s assessment for strong growth through the end of this year. “We saw the economic activity print for August come in at 3.5% year-over-year (0.6% month-over-month) from the very strong 4.5% y-o-y (1.5% m-o-m) in July. With economic activity averaging 2.8% y-o-y through August, we expect growth will come in at just under 3% this year, before trending closer to 2.5% in 2025,” Sinitsky says cautioning that there could be some risks to this forecast due to a slowdown in mining production caused by environmental disruptions, bringing 2024 growth to under 2.8%.

IMF data shows Peru is on target to end 2024 with an annualized inflation rate of 2.4% and forecasts a 2% rate by the end of 2025. The markets expected a 0.25% cut in the country’s 5.25% interest rate in October, but the BCRP kept the current rates for at least another cycle citing stability—a term echoed in Moody’s upgrade of Peru’s outlook last September from “negative” to “stable” while affirming its country Baa1 rating for unsecured debts and Aa3 rating for local/foreign currency country ceilings.

The Peruvian currency has also been on a stable trajectory without extreme movements for over three years. Sinitsky attributes that to heavy management by the BCRP, which holds ample foreign reserves of between 14-17 months of import cover.

For Jonathan Kleinberg, asset management director at Zest, a Lima-based wealth tech company, the BCRP’s independence in forging monetary and inflationary policy is behind Peru’s successes in maintaining monetary stability despite the political scenario shortcomings.

“As a result, inflation has been well within target since April and is the lowest rate in Latin America. Peru has also demonstrated it can maintain macroeconomic stability despite the political and social unrest of the past few years,” he explains.

Mineral Wealth

Peru’s trade balance remains positive thanks to its mining exports and the high price of metal commodities, which bolsters market liquidity, private sector credit, and confidence in the whole system, according to Kleinberg.

Data from the US Geological Survey indicates Peru holds 12% of global copper reserves, 3.9% of gold, 15.3% of silver, 9.5% of zinc, 5.3% of lead, and 2.8% of the world’s tin. Peru ranks as the world’s second-largest producer of copper, silver and zinc as well as a significant producer of gold, tin and molybdenum, and, according to Peru’s Ministry of Energy and Mines (PMEM), the sector is responsible for 62% of the country’s exports and 9% of GDP.

Among the bigger names exploring Peru’s mineral riches are Grupo Breca, Antamina, Hochschild Mining, Cerro Verde, Minas Buena Ventura, Southern Copper, and Canadian Barrick Gold Corp. According to PMEM, the sector is projected to attract $5.1 billion in investment by the end of 2024, with a positive outlook for the next two years.

“Peru can be a very attractive market for foreign investors, because of its vast natural resources’ portfolio and a historically stable macroeconomic environment, solid monetary policy, and a well-regulated banking system with a strong and independent central bank — all factors that increase investor’s confidence,” says Victor Oliveira, chief financial officer for Peru and Bolivia at Havas Group, a multinational French advertising and public relations group belonging to Vivendi.

“The country’s strategic location in northwestern South America bordering the Pacific Ocean makes it an excellent hub for facilitating commerce with Asia and the US, but this will still demand vast investments in infrastructure,” he adds.

Peru’s Ministry of Economy and Finances (MEF) estimates that the country will need to invest $150 billion, or 60% of its GDP, within the next five years in both approved projects and those pending approval.

“This includes construction, mining, electrical transmission grid upgrades, ports, and energy reconversion projects — all enormously attractive investment opportunities,” says Kleinberg.

Among the flashiest infrastructure projects in Peru is the new mega Port of Chancay, which will increase some of the country’s unit-freight capacity by 48%. China’s Cosco Group  built the $3.6 billion-plus facility, which opened Nov. 14.

“Once Chancay is [fully] operational, it will be the largest private port in the world, and it will mainly function as a hub for the Americas’ Pacific coast. Only 15% of its capacity is expected to be used to supply domestic Peruvian needs,” explains Lucas Baptista, Peru country manager at Brazilian Craft group, a unit of LCL Logistics.

According to Baptista, Chancay will free up space at other ports, increasing Peru’s ability to export its own products. “Exports represent 23% of the country’s GDP and besides minerals, include fruits, fish byproducts, and textiles with important manufacturing hubs for Lacoste and Tommy Hilfiger. Better infrastructure will also mean easier imports — including cars, rice, and electronics,” he says.

Havas’s Oliveira notes that Peru is also expanding and improving its digital infrastructure, which is crucial for its services market. “Tourism has a huge potential and has many bottlenecks capping its growth potential. It is also the sector with the highest informality employment rate. Banking is another sector with huge potential,” he says.

“Financial inclusion represents a big investment opportunity in Peru,” Kleinberg concurs. “Peru has a current bankarization level of 57%. This is subpar for the 68% level seen in countries with a similar per capita GDP. There is a real possibility of bringing 2.5 million adults into the banking system in this country.”

“FDI inflows rebounded in 2022,” Sinitsky says, “before falling in 2023 due to historically large protests. As stability seems to have returned in 2024, the government estimates inflows will be much stronger and will reach record highs next year. We think their projections are reasonable as we also expect fairly strong growth and relative political stability next year.”

However, with elections set to take place in 2026, overspending and political disorder remain major threats.

“Peru’s political space is incredibly chaotic, with over 30 political parties having registered to run in the 2026 election. However, the country’s institutions and central bank are concerned about international investment and have done well in protecting the property rights of foreign firms. We therefore expect Peru will remain an attractive place to invest,” BMI’s Sinitsky concludes.