Peru central bank lowers 2026 GDP growth estimate on El Niño impact

Peru's central bank ​lowered its projection for ‌gross domestic ​product (GDP) growth this year to 3.2%, from a previous estimate of 3.4%, due ‌to the impact of the El Niño weather phenomenon, central bank chief Julio Velarde said on Friday. The bank also raised its ‌2026 inflation forecast to 4.2% from 3.8%, and projected 2027 ‌GDP growth at 3.0%.

• In its quarterly report, the central bank projected the 2026 fiscal deficit at 1.5% of GDP, improved from a ⁠prior estimate ​of 1.8%, ⁠while projecting the 2027 fiscal deficit also at 1.5% of GDP. • El Niño ⁠is already affecting Peru's fishing and agricultural sectors, posing a risk ​to exports of fishmeal and fruit - both strong growth drivers ⁠in recent years - even as the country remains the world's third-largest copper ⁠producer.

• ​Velarde said despite the current context, he sees "enormous potential" in Peru, mainly in the mining sector. • He ⁠said an interest rate hike in coming months could not be ⁠ruled out, ⁠but he added the "opportune" moment would be sought to cut rates.