Economic growth picks up in the third quarter of 2025

GDP growth matches market expectations: Peru's GDP grew 3.4% in annual terms in Q3, following 2.6% growth in the previous quarter. The reading was above the post-pandemic average and in line with market expectations. On a seasonally adjusted quarter-on-quarter basis, economic output rose 1.2% in Q3, following 0.4% growth in the prior quarter.

Domestic demand drives acceleration: Relative to the prior period's data, readings in Q3 improved for government consumption (+4.8% on a year-on-year basis vs +3.6% in Q2) and fixed investment (+10.0% vs +7.9% in Q2). In contrast, readings softened for exports of goods and services (+1.9% vs +3.3% in Q2) and imports of goods and services (+10.7% vs +12.9% in Q2). Finally, the variation in private consumption was the same as in the prior quarter (+3.6% in Q3 and Q2). Fixed investment was buoyed by lower interest rates, expanding credit and increased mining infrastructure spending amid elevated copper and gold prices. Moreover, higher hiring levels in the public sector bolstered government spending, and rising household purchasing power supported private spending. In contrast, protests and adverse weather weighed on copper export growth.

Economic growth to ease further ahead: Our panelists expect year-on-year economic growth to decelerate in the last quarter of 2025 and then broadly stabilize around Q4’s level next year. In 2026 as a whole, political uncertainty over April’s elections is set to drag on domestic demand, while slower growth in main trading partner China is set to weigh on the external sector. Still, high average copper and gold prices and lower interest rates will support economic activity. The electoral cycle is key to monitor.

Panelist insight: On the outlook, Itaú Unibanco analysts said: “Activity continues to evolve in line with potential and our forecast, leading us to keep our GDP growth forecasts for 2025 and 2026 at 3% and 2.7%, respectively. The strong, positive terms-of-trade shock and ongoing investment dynamics pose upside risks to our 2026 growth forecast.”

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