To enhance firm productivity, priority should be given to removing barriers that hinder the growth of medium-sized businesses, rather than trying to formalize the large number of informal firms in the country. Improving institutional capacity will require measures such as establishing an attractive civil service system for public institutions, prioritizing attracting talent through competitive processes, and simplifying administrative procedures. Additionally, to address regional disparities, the public investment system must be reformed to ensure that public works are completed effectively and provide tangible benefits to citizens.
Currently, Peru’s macroeconomic environment remains stable. In 2024, the fiscal deficit closed at 3.6 percent of GDP, exceeding the fiscal rule limit of 2.8 percent. Fiscal consolidation is projected for 2025, with the deficit expected to decrease to 2.5 percent in 2025 and 1.8 percent in 2026. Meanwhile, the debt-to-GDP ratio is anticipated to remain stable at around 34 percent. Inflation is expected to stay within the central bank’s 1-3 percent target.
Peru’s economy is projected to grow by 2.9 percent in 2025 and 2.5 percent in 2026, which is close to its potential. According to the poverty line of US$6.85 per person per day, the poverty rate was 31.3 percent in 2024, still higher than the pre-pandemic level of 28.8 percent in 2019. This rate is expected to decline to 30.5 percent in 2025 and 29.9 percent in 2026.
