Overview
- The BCRP revised its projections on Friday and lowered GDP growth to 3.2% for 2026 and 3.0% for 2027, saying an extraordinary El Niño will subtract about 0.9 percentage points from 2026 and 1.1 points from 2027.
- The bank singled out primary sectors for the hit, forecasting a 30.7% fall in fishing for 2026 and roughly a 1.5% drop in agropecuary output, which will weigh on coastal harvests, processing plants and incomes in affected communities.
- Despite the primary‑sector shock, the BCRP raised its private investment forecast to 14% for 2026 and expects strong domestic demand and non‑primary growth to partly offset losses in mining, manufacturing and services.
- Inflation is projected to finish 2026 near 4.2%, above the BCRP target range, and the policy rate, currently 4.25%, could be raised if El Niño‑related supply shocks push price rises or expectations into a persistent pattern.
- The central bank also highlighted governance risks that could affect mining investment, estimating informal gold accounted for about 50.5% of gold exports in H1 2026 and warning that weak protection of property rights may deter formal projects.