LIMA (Reuters) -Peru should implement economic measures to counter political uncertainty that is expected to intensify ahead of the 2026 general elections, the Organisation for Economic Co-operation and Development said in a report published on Monday.
WHY IT'S IMPORTANT
The recommendations from the OECD aim to bolster Peru's economy, as political instability and social protests have undermined confidence in a nation where six different presidents have served in the last nine years.
KEY QUOTES
"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 at the report's presentation.
Peru's economy maintains "solid macroeconomic fundamentals," but the country also needs to restore fiscal discipline and implement more reforms to regain investor confidence and reduce inequality, the report said.
"Growth will moderate amid global and domestic uncertainty and a lower potential growth rate," the report added.
BY THE NUMBERS
The OECD projects GDP growth of 2.8% this year and 2.6% in 2026 for the world's third-largest copper producer. These figures are below the Peruvian government's own estimates of 3.5% and 3.2%, respectively.
The OECD expects inflation to fall within the central bank's target range of 1% to 3%.
CONTEXT
Peru has faced intermittent protests against President Dina Boluarte's government. Her approval rating has languished at historic lows of 2% to 4% since last year, according to polls.
Despite these challenges, the OECD noted Peru's economy has shown resilience, growing at an average annual rate of 3.7% from 2008 to 2024 - one of the highest rates in Latin America.
WHAT'S NEXT
Peru will hold presidential and legislative elections in April next year, with more than 40 parties registered.
The deep political fragmentation will make it difficult to reach a consensus to sustain the country's growth, the OECD said.
The OECD also urged Peru to restore compliance with its fiscal rule and invest in infrastructure, education and climate resilience, all while maintaining strong public finances to face its political challenges.
(Reporting by Marco Aquino in Lima; Writing by Aida Pelaez-FernandezEditing by Matthew Lewis)
