Peru's strong economic growth over the past two decades has already boosted incomes and living standards. To continue its growth trajectory, Peru needs to maintain strong public finances, unlock its human capital potential, and improve the business environment, especially for smaller firms, according to a new OECD report.
The latest OECD Economic Survey of Peru projects GDP to grow by 2.8% this year and 2.6% in 2026. With inflation within the Central Bank's target band of 1-3%, monetary policy should stay broadly neutral, and data-driven to guard against global and domestic risks to price stability.
Looking ahead, the challenge is to boost resilient and inclusive growth while maintaining strong public finances. Restoring compliance with the fiscal rule would preserve the country's strong macroeconomic framework and safeguard investor confidence. Reforms to improve public spending efficiency and optimise revenues by broadening the tax base and reducing evasion would create space for productivity-enhancing and necessary social investments.
"Peru can strengthen the foundations for long-term growth by enhancing workforce skills, boosting small businesses' access to finance, encouraging formal job creation and accelerating climate adaptation," OECD Secretary-General Mathias Cormann said, presenting the Survey in Lima alongside Peru's Prime Minister Eduardo Arana Ysa, Minister of Foreign Affairs Elmer Schialer Salcedo, and Minister of Economy and Finance Raúl Pérez-Reyes. "Financing necessary investments in infrastructure, education, social protection, and climate change adaptation and mitigation will require better spending efficiency and strong fiscal institutions to safeguard public debt sustainability."
The Survey finds that high informality and weak learning outcomes are holding back Peru's potential to drive formal job creation and growth. A comprehensive strategy to promote formal jobs is needed, including better skills, lower social security contributions for low-income workers, simplified employment and businesses regulations, and stronger enforcement of tax and labour laws. Strengthening the rule of law is key to ensure these reforms are implemented effectively.
Investing in human capital will be important. Expanding high-quality early childhood education and care, especially for lower-income families and in rural areas, would lift learning outcomes and ease care responsibilities for women, allowing more of them to take up formal and better-paid work. Strengthening vocational education and training would also unlock formal job opportunities for youth.
Limited access to finance is hurting investment and the transition to a more resilient and inclusive economy. Credit penetration remains low, and micro, small, and medium-sized enterprises (MSMEs), which make up the large share of the business sector, struggle to access affordable credit. Reforms should focus on lowering financing costs, developing alternative funding sources tailored to the needs of MSMEs and deepening capital markets.
Peru is highly vulnerable to climate change and has pledged to reach net-zero emissions by 2050, but reducing emissions and building resilience will require ambitious action. Halting deforestation, and expanding renewable energy and low-emissions transport, while strengthening adaptation policies, would enhance environmental resilience and support sustainable growth.
