Peru’s Economy Expands 3.9% in Q1 2025 Driven by Domestic Demand and Export Surge

Peru’s economy grew 3.9% year-on-year in the first quarter of 2025, according to the National Institute of Statistics and Informatics (INEI), marking its fourth consecutive quarter of robust growth.

The expansion was fueled by a 4.4% rise in domestic demand, including a 9.7% jump in fixed investment and 3.9% growth in total consumption.

Private spending, accounting for 62.2% of GDP, climbed 3.8% as labor income rose 5.9% and employment expanded 1.3%.

Key sectors like manufacturing (4.4%), mining (3.2%), and services (3.4%) led the gains. Construction activity rebounded sharply, while agriculture and fisheries grew 6.1% on higher production of export-oriented crops.

Exports surged 14.2% to $20.625 billion, driven by copper, gold, natural gas, and agricultural goods like grapes and fishmeal.

Mining exports alone rose 29.8%, representing 51.7% of total shipments. Imports increased 15.5%, reflecting demand for industrial machinery and vehicles.

Peru’s Economy Expands 3.9% in Q1 2025 Driven by Domestic Demand and Export Surge

The labor market improved, with unemployment dropping to 5.9% in April—a six-month low—as formal job creation accelerated.

Inflation eased to 1.9% in 2024, stabilizing household purchasing power. The Central Bank cut its benchmark rate to 4.5% in May, citing manageable price pressures and a economy operating near potential.

Despite global trade uncertainties, Peru’s trade surplus hit $6.062 billion, aided by rising demand from China and the U.S.

Non-traditional exports, including processed foods and textiles, grew 22.5%, signaling diversification efforts.

Twenty-one of Peru’s 25 regions posted export gains, with rural areas outpacing Lima-Callao.

Pre-election tensions and slower public investment remain challenges, but private sector confidence strengthened due to streamlined mining permits and infrastructure projects.

Analysts project 2025 growth at 3.1%, supported by sustained consumption and mining output.

The fiscal deficit is expected to narrow to 2.4% of GDP, bolstered by higher tax revenues.

Peru’s resilience highlights its balanced economic strategy amid fluctuating commodity markets and geopolitical headwinds.