Peru’s Quiet Recovery: Stronger Growth Built On Private Investment

Peru’s economy expanded 3.4% year-on-year in the third quarter of 2025, up from 2.6% in the previous quarter and extending a seven-quarter growth streak.

It marks a clear break from the 2023 recession, when protests and climate shocks briefly pushed output into reverse. The central bank says the latest numbers are powered mainly by private demand rather than a state spending surge.

Private investment jumped 11.4% compared with a year earlier, its fastest pace in years, driven by a sharp rebound in mining projects and solid non-mining investment in construction and services.

Business expectations have moved back into the optimistic zone, helped by low and stable inflation and a steady recovery in credit. Households are also spending again.

Private consumption grew 3.6%, the eighth consecutive quarter of expansion, as more Peruvians found jobs and real incomes improved with inflation near the middle of the 1–3% target range.

Public consumption and public investment each rose 4.8%, supported by more hiring and faster execution of regional and local infrastructure projects. Crucially, public spending is reinforcing, not replacing, the push from the private sector.

Export-oriented agriculture, fisheries and metallic mining are leading the recovery, while non-primary activities grow on the back of stronger domestic demand.

A Steady Growth Path

That matters far beyond Lima: Peru is a key supplier of copper and gold, so a more stable output path can ease worries in global commodity markets already nervous about weak growth elsewhere.

Most forecasts now cluster around growth of about 3% a year in 2025 and 2026, supported by firm mineral prices and a fresh wave of mining investment.

Peru enters this phase with relatively low public debt, a fiscal deficit on a gradual consolidation track, and a central bank that foreign investors still view as one of the most orthodox in the region.

The main risk is political: the 2026 election will renew the central bank’s board and test whether this rules-based model, built around price stability and space for private enterprise, can endure in a region where more interventionist experiments have often ended badly.

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