Peru

Latin American financial assets have emerged among the best-performing markets worldwide at the start of 2026, driven by an unusual alignment of positive political catalysts, strong commodity prices, and renewed global appetite for emerging markets.

Equities and currencies across the region have sharply outpaced developed markets, reversing several years of relative underperformance.

The shift in sentiment has been triggered by a sequence of closely timed developments.

A sustained upswing in commodity prices — particularly industrial and precious metals — has strengthened the outlook for South America’s export-driven economies.

And while the full consequences of the recent US seizure of Venezuela’s Nicolás Maduro have yet to play out, some investors view the ousting as positive. A number hope the move will reduce geopolitical tail risks long associated with the region.

Adding to the momentum, the announcement of the EU–Mercosur trade agreement revived expectations of deeper trade integration between Europe and Latin America, even as doubts remain over its full implementation.

Global macro conditions have also played a decisive role. Major investment banks, including Bank of America and AllianceBernstein, indicate that a weaker US dollar in 2026 is boosting the appeal of emerging market assets.

Historically, periods of dollar weakness have coincided with strong emerging market performance, as capital shifts toward countries where returns are higher.

Countries most exposed to metals markets have been the primary beneficiaries. Chile and Peru — key producers of copper, silver and gold — have enjoyed substantial windfall gains from the metals rally.

Chile, the world’s largest copper exporter, shipped 14.9 million tonnes of the metal in 2024, according to ITC Trade Map data.

Latin America shines among top-performing global markets

Performance data compiled by CountryETFTracker show that five Latin American countries now rank among the world’s ten best-performing equity markets over the past three months.

Chilean stocks are up 36.6% since mid-October, making them the best-performing investable equity market globally via exchange-traded funds. Simultaneously, the Chilean peso has appreciated more than 8% over the past two months, reflecting improved terms of trade and renewed portfolio inflows.

Argentina has been another standout, with a 27.45% rally in equity markets since October. Investors have responded positively to the liberalisation reforms introduced by President Javier Milei, who took office in December 2023.

The International Monetary Fund, in its latest Regional Economic Outlook, credited the Milei administration with enacting “an ambitious package of market-oriented reforms” targeting productivity, regulatory simplification, and fiscal sustainability.

The IMF noted that, if sustained, these reforms could yield substantial medium-term gains by opening Argentina’s economy and improving investor confidence. That’s despite the fact that such austerity forms were particularly unpopular with the general public when first announced, triggering protests in Argentina.

Beyond Chile and Argentina, Peru has posted equity gains of around 27%, with the Peruvian sol now trading at its strongest level relative to the dollar in over five years.

Elsewhere, equities in Colombia rose about 16%, and Brazil has rounded out the regional leaders with a 12.9% rally.

By contrast, the US S&P 500 has gained just 4.8% over the same period, while Germany’s DAX is up around 5%, underscoring Latin America’s marked relative outperformance.

EU–Mercosur agreement signals strategic shift for Latin America

The long-awaited EU–Mercosur trade agreement, more than two decades in the making, is set to be formally signed on 17 January in Paraguay, marking a turning point in relations between Europe and South America.

For the founding members of the Mercosur bloc — Argentina, Brazil, Paraguay and Uruguay — the accord represents their first major trade agreement with an external partner, opening preferential access to a market of nearly 450 million EU consumers.

“The approval of the EU–Mercosur trade agreement is a landmark moment, creating the largest free trade area in the world by population,” Ángel Talavera, head of European macro at Oxford Economics, said in a note.

Combined, the EU and Mercosur economies account for around a quarter of global GDP and roughly 780 million people.

For Latin American markets, experts say the significance goes beyond improved agricultural access to Europe. The agreement is expected to lower tariff and non-tariff barriers on industrial inputs, particularly benefitting manufacturing-heavy economies such as Brazil and Argentina by reducing costs, improving competitiveness and strengthening supply-chain integration.

According to a study by Banco Santander, the deal is poised to transform trade and investment flows across South America. The EU already accounts for close to €370bn in foreign direct investment into Mercosur and over €125bn in annual trade.

Brazil’s Institute for Applied Economic Research expects the deal could lift Brazil’s GDP by around 0.5 percentage points and raise investment by 1.5 percentage points annually, reflecting stronger export prospects and increased foreign direct investment.

Estimates from Real Instituto Elcano and the Bank of Spain suggest EU–Latin America trade could expand by up to 70% over time, while intra-regional trade within Latin America could rise by as much as 40%.

A turning point for Latin America?

Latin America’s recent strong performance in global financial markets seems to reflect more than just cyclical tailwinds.

Rising commodity prices, easing geopolitical risks, and a weaker US dollar have all helped draw global investors back to the region after years of underperformance.

At the same time, reform momentum in countries such as Argentina and renewed trade links with Europe have improved perceptions of policy stability and long-term growth potential.

While challenges remain and many of the economic benefits will take time to materialise, markets are increasingly viewing Latin America as a relative bright spot among emerging economies.

For now, the region’s combination of high returns, improving fundamentals, and strategic relevance in global trade is proving hard for investors to ignore.

The main ingredient in lomo saltado, the juicy, stir-fried comfort dish of my childhood, only takes a minute to cook. It can go by in such a flash that you can miss it if you’re not paying attention, so I always made sure to watch for that moment when the flames go up.

I remember standing in rapt attention at the edge of the stovetop as my mom tossed fresh, thinly sliced beef into an oiled pan set on maximum heat. The steak hissed and leaped in a dramatic dance as flames licked the pan from underneath. My mom turned to me and said, “This is why it’s called lomo saltado: the lomo is the steak, and watch how it’s saltando — jumping.”

“The secret is in the smoke,” says Miriam Ramirez, owner of Lonzo’s Restaurant in Culver City. “When you cook lomo saltado, the room should be filled with the smell of smoke. I remember getting it for lunch in Peru and thinking, ‘Oh no, my hair smells like smoke!’ But that’s how I knew it would be good.”

Lomo saltado consists of tomato, onion and bell pepper, seared with steak, traditionally in a wok, and served with sides of rice and potato fries. Peruvians call soy sauce, which is used generously in the dish, “sillao” (pronounced see-yow).

Newcomers to Peruvian cuisine might be surprised to find that soy sauce has a major place in recipes. My Peruvian family always says that in any good meat dish, sillao is the secret ingredient.

“When the dish is already so simple, every ingredient matters,” Ramirez says.

“See-yow” is also the pronunciation for soy sauce in Cantonese. Understanding how a Cantonese word entered Peru’s lingo is a long historical lesson that can be best explained by another Chinese-Peruvian word: chifa. Chifa, which comes from the Mandarin word “chīfàn,” meaning to eat, describes the thriving Chinese-Peruvian fusion cuisine and indirectly, the immigrant history of Peru.

According to researcher Patricia Palma, Chinese immigrants arrived in Peru in the mid-19th century, as laborers after the abolishment of slavery created a demand for cheap labor. As this population grew over the years, Chinese-Peruvian descendants carved out a niche in chifa that reflected their heritage alongside centuries-old Peruvian staples.

“L.A. is so diverse and that’s why I think Peruvian food draws people in. It has a multicultural identity too,” says Benny Gomez, owner of Rosty Peruvian Food in Highland Park. “There’s Chinese and Japanese communities who identify with the Asian influence but also Mexican people who are seeing a different type of Latino food.”

Peru’s lomo saltado is not only a beautiful marriage of the two cultures, but a perfectly balanced ode to each culture’s culinary traditions: Peru is reflected in the potatoes, aji amarillo and bell pepper, and China in the stir-fry technique and of course, the sillao.

“Peruvian food has 14,000 years of history,” says Ignacio Barrios Jacobs, lead chef of Merka Saltao in Culver City. “I think [lomo saltado] holds the story of Chinese immigrants who were cooking their food for people who said, ‘this needs my potato and chile peppers.’”

In Culver City, East Hollywood, and the San Fernando Valley, Peruvian restaurants are combining traditional flavors with distinctly Angeleno flair, like saltado burritos or California oak wood-fired rotisserie chicken.

“When my dad opened his Peruvian restaurant 30 years ago, Peruvian was not popular at all in L.A.,” says Dennis Tamashiro, owner of Mario’s Peruvian and Seafood. “Now, people are paying attention, because it proves that it’s unique.”

Here are eight takes on lomo saltado to try in Los Angeles, from classic versions that remind me of home, to creative takes that make the dishes distinctly L.A.

The move opens key assets to private investment and comes as Petroperu faces mounting losses and debt.

Peru’s government has approved an emergency decree allowing private investment in parts of the state-owned oil company Petroperu, as authorities move to stabilise a firm weighed down by mounting losses and debt.

President Jose Jeri announced the decision shortly before the beginning of the new year.

The measure permits the reorganisation of Petroperu into one or more asset units, opening the door to private participation in key operations. That includes those at the flagship Talara refinery, which recently underwent a $6.5bn upgrade.

Beyond the refinery, Petroperu operates or holds concessions for six crude oil blocks with limited production, alongside a nationwide fuel distribution and marketing network.

In a statement, Peru’s Ministry of Energy and Mines said the decree seeks to “ensure compliance with financial obligations through technical management of its assets, laying the foundation for Petroperu to become a self-sustaining company”.

The ministry said the company’s financial position “is particularly sensitive”, citing accumulated losses of $479m between January and October 2025, as well as debts to suppliers totalling $764m through December.

Those figures come on top of reported losses of $774m in the previous year.

Petroperu’s financial strain has been compounded by debt linked to the Talara refinery modernisation, which ultimately cost double its original estimate and led to the company losing its investment-grade credit rating in 2022.

Since then, the government has repeatedly stepped in to support the firm, providing about $5.3bn in financing between 2022 and 2024.

The company, which is seen as crucial to Peru’s energy security, has also faced environmental scrutiny.

Authorities declared an “environmental emergency” and launched an investigation following an oil spill along a stretch of the country’s northern coastline in 2024, affecting an estimated 47 to 229 hectares (about 116 to 566 acres).

The Petroperu restructuring effort comes amid persistent political instability in Peru. Several presidents have failed to complete full terms in recent years, including Dina Boluarte, who was impeached by Congress in October.

Her successor, Jeri, has struggled to steady leadership at Petroperu, appointing three board chairs in just three months.

The move comes as Peru faces continuing political volatility, economic uncertainty and public pressure for stronger oversight of state institutions.

Local officials say the death toll could rise as seven people are missing following the attack on New Year’s Eve.

At least three people have been killed and seven remain missing following an attack on an informal mine in northern Peru, according to local officials.

In a video shared by the Peruvian news outlet Canal N on Thursday, Pataz Mayor Aldo Marino said the attack took place about an hour before midnight on New Year’s Eve.

“According to information I received from the police, three people were killed at a mine entrance, and seven are missing,” Marino said, noting that the final death toll could be as high as 15 as more bodies are recovered.

Details of the incident are still emerging, but informal mining operations are a frequent source of conflict in South America, as criminal groups jockey for control.

The latest incident took place near the town of Vijus, in the department of La Libertad in northwestern Peru.

Police reported that 13 miners had been killed in the same region last May. That incident prompted a stern response from local authorities, including the 30-day suspension of mining activities and a night-time curfew.

The region is known for its gold mines, including one of the largest in the world, Lagunas Norte.

But informal mines have also cropped up, as rural residents and criminal gangs try to carve a fortune from the mountains of Pataz, the province where the recent bloodshed unfolded.

In the wake of Wednesday’s incident, police have arrested two people, and an investigation is under way.

The news agency Reuters cited local prosecutors as saying that 11 shell casings had been recovered at the scene of the attack.

A mining company, Poderosa, also told the media that its security personnel had heard the gunfire and, after approaching the crime scene, discovered that three people were dead.

Many informal miners operate using temporary permits issued by the government, known as REINFO permits.

Reuters reported that the government suspended the permits of about 50,000 small-scale miners in July as part of a formalisation process, allowing about 30,000 to continue operations.

Peru exported $15.5bn worth of gold in 2024, compared with $11bn the year before. The country’s financial watchdog has estimated that about 40 percent of the country’s gold comes from illicit enterprises.