Banks maintain Peru GDP projections despite tariff uncertainty

The outlook for the Peruvian economy remains strong despite US tariffs and the trade war unleashed by Donald Trump.

According to reports from major banks in Peru, the impact of the 10% general tariff imposed by Trump would be limited due to the seasonality of the country's exports to the US, and the main risk would come from a global slowdown, about which there are still doubts.

On the other hand, the Peruvian economy is gradually recovering, and domestic consumption is growing at higher rates than in 2024. Banco de Crédito del Perú (BCP), Scotiabank, and BBVA maintain projections for GDP growth ranging between 3.1% and 3.3% in 2025.

"The current situation is unique, as there has been no experience with such an ambitious tariff policy in modern times. We understand that the risk of a global slowdown has increased, but the extent of the impact is still not clear enough to warrant revising our GDP growth projections for Peru," Scotiabank said in a report.

According to the bank, the tariff of only 10% positions Peru better than other countries with higher rates, and Peruvian exports have competitive advantages.

"For many products, Peru has the advantage of being located in the southern hemisphere, which puts its sales in the opposite season to production in the northern hemisphere, where most of the world's producers are located, including the US. Additionally, many agro-industrial products are highly productive, which helps offset the imposed tariffs," Scotiabank adds.

In terms of textile exports, many shipments are high-end and target specific niches, allowing them to absorb the 10% tariff.

Domestic economy

Despite the shocks to foreign trade, the Peruvian economy has been gradually recovering in the first months of 2025 and is beginning to feel the effects of a reduction in the benchmark interest rate in 2024. According to BBVA, private consumption is expected to grow between 3% and 4% in the first quarter of the year, and several sectors are showing improvements.

"The increase in household spending is occurring in an environment where the labor market continues to show a positive performance: greater creation of formal jobs in the private sector, a decline in underemployment, and improved wages in Lima. In March, a general acceleration was observed across all spending categories, except food and entertainment, which saw year-over-year growth slow but maintained positive rates," says BBVA.

Pending risk

While no short-term changes in GDP expectations are projected, the risk of additional tariffs, retaliation from China and other measures remains. This is undoubtedly the main threat to the Peruvian economy, analysts say. According to Scotiabank, although copper has been excluded from the tariffs, Trump does not rule out a future 25% duty, which would lead to changes in the price of the red metal.

"The biggest risk for industrial metals is that the US tariff policy (and any subsequent retaliation) could trigger a global economic slowdown, affecting global metal prices," the bank said.