Economic growth slows in the fourth quarter of 2025

GDP reading: Peru's GDP expanded 3.2% on a year-on-year basis in Q4, following a 3.8% expansion in the prior quarter. The reading was above the Latin American average and above Peru’s own average growth over the past ten years.

Drivers: Compared with the previous period's data, readings in Q4 softened for private consumption (+3.4% on a year-on-year basis vs +3.6% in Q3), government consumption (-1.3% vs +4.7% in Q3) and fixed investment (+8.9% vs +10.1% in Q3). In contrast, the reading for exports of goods and services improved in Q4 (+4.0% vs +2.5% in Q3). Finally, the variation in imports of goods and services was the same as in the prior quarter (+10.9% in Q4 and Q3).

Panelist insight: On the near-term outlook, BBVA analysts said: “January indicators suggest that economic activity began the year with growth above 3.0%. The main driver remains private spending, supported by contained inflation, improving confidence, and stronger labor market conditions.” On the outlook for this year as a whole, Goldman Sachs’ Santiago Tellez said: “Real activity momentum has moderated in Q4 following a very strong Q3. Going forward, our constructive outlook for copper and especially gold—the country’s main export commodities—should support terms of trade and mining activity. Household consumption will benefit from positive labor market dynamics and the authorized eighth pension fund withdrawal. Headwinds from the normalization of transient factors that previously depressed activity should largely dissipate by early 2026. The main downside risk to the recovery of business sentiment and private investment, which hitherto has remained robust, stems from the unsettled political backdrop with a highly fragmented electoral landscape and rising risk of another shortened presidential term.”

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