Overview
- The Banco Central de Reserva del Perú lowered GDP growth to 3.2% for 2026 and 3.0% for 2027 in its September inflation report, citing an updated scenario that foresees an El Niño of extraordinary magnitude.
- The bank now estimates El Niño will subtract 0.9 percentage points from 2026 growth and 1.1 points from 2027 growth, with primary sectors hit hardest by the revision.
- BCRP projects steep sector losses in 2026, including agriculture falling about 1.5% and fishing plunging roughly 30.7%, and expects primary-industry output to contract around 7.1%.
- Strong domestic demand and a raised forecast for private investment to 14% in 2026 are expected to partly offset the shock, led by mining and construction activity.
- The central bank projects 2026 inflation at 4.2% and left the policy rate at 4.25% while warning it will raise rates if El Niño-driven food and fuel price pressures prove persistent and push up inflation expectations.