Peru Raises 2026 Growth Outlook to 3.5%; Minister Cites Possible 4%

Peru · Economy

Economy Minister Elmer Cuba raises Peru’s 2026 growth forecast to 3.5%, possibly 4%.

Peru’s 2026 growth outlook was raised to 3.5% by the Economy and Finance Ministry (MEF) on August 7. Economy Minister Elmer Cuba said the economy could grow “3.5% or perhaps 4%” this year.

According to statements carried by Andina and Reuters. The revision, announced in an interview with Latina Television’s “Punto Final” program.

Marks a modest upgrade from the 3.2% forecast set in the MEF’s April macroeconomic update, as reported by Infobae. Cuba attributed the change to stronger-than-expected domestic demand and investment, while acknowledging persistent risks from the coastal El Niño weather phenomenon.

The new projection aligns Peru more closely with the 3.53% expansion recorded in 2025. A year that saw the economy rebound on the back of mining exports and a recovery in construction, according to Reuters-syndicated data.

What Is Behind the 2026 Growth Outlook

Peru’s Economy and Finance Ministry (MEF) lifted its 2026 GDP growth projection to 3.5% on August 7, according to Minister Elmer Cuba. The previous official forecast, from the MEF’s April 2026 macroeconomic update, was 3.2%, as reported by Infobae.

In a later statement, Cuba said the economy could grow “3.5% or perhaps 4%” this year, according to Andina. The revised outlook contrasts with a 3.53% expansion in 2025, based on Reuters-syndicated coverage.

The minister’s comments came during an interview with Latina Television’s “Punto Final” program. Where he emphasized that the stronger domestic demand and investment were key drivers behind the upgrade.

Analysts had anticipated the revision, as market expectations had already converged near the official figure. Scotiabank, in its August 7 daily publication.

Noted that the new forecast was in line with its own projections, suggesting limited surprise in financial circles. The MEF’s April update had been seen as conservative.

Given the momentum in private consumption and public infrastructure spending observed in the first half of the year. Cuba did not provide a sector-by-sector breakdown of the growth drivers in the reported statements.

However, he reiterated that the economy was showing resilience despite external headwinds. Including the lingering effects of the coastal El Niño phenomenon, which can disrupt fishing and agriculture.

The minister’s tone was cautiously optimistic, reflecting confidence in the government’s policy mix.

Minister Cites Resilience Despite El Niño

Minister Cuba attributed the upgrade to stronger-than-expected domestic demand and investment, according to comments broadcast on Latina Television’s “Punto Final. ” He acknowledged risks from the coastal El Niño weather phenomenon, but said the economy was showing resilience.

The minister did not provide a specific breakdown of growth drivers in the reported statements. Analysts at Scotiabank and other institutions have noted that market expectations were already close to the official figure.

According to Scotiabank’s August 7 daily publication. The bank’s research desk had forecast 3.5% growth for 2026, aligning with the MEF’s updated projection.

El Niño episodes in Peru typically affect the northern coastal regions. Impacting key economic sectors such as fishing, agriculture, and related processing industries.

The phenomenon can also disrupt transportation and infrastructure, as seen in past events. Cuba’s acknowledgment of these risks suggests that the revised forecast incorporates a degree of caution, even as the economy shows underlying strength.

The government’s broader economic strategy has focused on maintaining macroeconomic stability while boosting investment in infrastructure and social programs. The 2026 budget, currently under congressional review, includes provisions for increased public spending.

Though the MEF has emphasized the need to keep the fiscal deficit within targeted bounds.

Five-Year Targets: Poverty, Informality, Growth

Minister Cuba said the government’s five-year commitment is to reduce poverty to 15% and labor informality to 50%. With a growth goal of 6%, according to Andina and Notiperu.

These targets are part of the administration’s medium-term economic agenda. The poverty target contrasts with the current rate, though the MEF did not provide a baseline figure in the statements.

The informality target would represent a significant reduction from current levels, but the minister did not specify the starting point. Peru’s labor informality rate has historically been among the highest in Latin America, with a large share of workers in informal jobs.

Poverty remains well above the government’s 15% target. The government’s targets imply a substantial transformation of the labor market, which would require sustained GDP growth and targeted social policies.

Cuba’s 6% growth ambition reflects a long-term vision, but it would require a significant acceleration from current levels. Such growth would need to be driven by productivity gains, increased private investment, and formal job creation, according to economists.

The minister did not outline specific policies to achieve these objectives. But the MEF’s recent reforms aim to reduce bureaucratic hurdles and promote investment in priority sectors such as mining, energy, and tourism.

Fiscal Deficit Targets Remain in Focus

The government’s near-term fiscal targets remain unchanged. With a deficit of 1.8% of GDP for 2026 and 1.4% for 2027, according to Reuters-syndicated coverage.

The MEF is also considering raising the longer-term deficit ceiling to 1.2% of GDP from the current 1.0%. The possible adjustment to the ceiling was reported by Reuters, citing unnamed officials.

No formal proposal has been presented, and the MEF has not commented publicly on the timeline for such a change. If implemented, the higher ceiling would allow greater fiscal flexibility.

Enabling the government to finance increased public spending without breaching its own rules. However, it also carries risks, including potential downgrades from credit rating agencies if debt levels are perceived as unsustainable.

Peru’s current sovereign rating is investment grade, but any policy shift could alter that assessment. The government’s fiscal framework is governed by the Fiscal Responsibility and Transparency Law.

Which sets limits on the structural deficit and public debt. The MEF has consistently met its targets in recent years.

And the proposed change would be part of a broader review of the framework, according to financial analysts.

Context: 2025 Performance and External Risks

Peru’s economy grew 3.53% in 2025, according to Reuters-syndicated data. That performance was driven by mining exports and a rebound in construction, though the report did not provide sectoral details.

The 2026 outlook faces headwinds from the El Niño coastal phenomenon, which can disrupt fishing and agriculture. Minister Cuba said the updated forecast accounts for those risks, but he did not detail the assumed impact.

Mining remains a cornerstone of Peru’s economy, accounting for roughly 10% of GDP and over 60% of export revenues. According to the Ministry of Energy and Mines.

In 2025, copper prices remained elevated, supporting the sector’s growth. While construction recovered on the back of public infrastructure projects, including the Lima Metro’s expansion.

The central bank has maintained a cautious stance on inflation, which was at 2.1% in 2025, within its target range. This has allowed the government to maintain supportive fiscal policy without stoking price pressures, according to analysts at BBVA Research.

Nevertheless, external risks, including potential global commodity price shocks and stricter international financial conditions, could affect Peru’s growth trajectory.

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Frequently Asked Questions

What is Peru’s new 2026 growth forecast?

The MEF raised its 2026 GDP growth projection to 3.5% on August 7, up from 3.2% in April. Minister Cuba said growth could reach “3.5% or perhaps 4%” this year.

Who announced the revised forecast?

Economy and Finance Minister Elmer Cuba announced the revision in statements to Latina Television’s “Punto Final,” carried by Andina and Reuters.

What are the government’s five-year economic targets?

The government aims to cut poverty to 15% and labor informality to 50% within five years. With a growth goal of 6% annually, according to Minister Cuba.

Are the fiscal deficit targets changing?

The near-term targets remain 1.8% of GDP for 2026 and 1.4% for 2027. The government is considering raising the longer-term ceiling to 1.2% from 1.0%, according to Reuters.

Sources: Andina, Reuters, Infobae, Notiperu, Scotiabank