Scotiabank raises Peru GDP projection

Scotiabank has raised its 2025 GDP projection for Peru from 2.5% to 2.8%, due to contributions from the Chancay megaport, infrastructure projects that were unblocked in 2023 and 2024, and because of lower interest rates and inflation.

In a report, the bank said that although politics will remain a factor, risk or instability will shift into 2026, when presidential elections are due.

“The 2.8% growth we project for 2025 is more organic, but it is not vigorous either. In some ways, the growth is quite similar to that of the 2014-19 period, but it is far from the records of the 2004-13 period, when growth was almost consistently above 5.0%,” the report said.

Scotiabank also said that the country has potential to achieve growth rates of over 6% in the current favorable macroeconomic climate and amid rising metals prices. But political uncertainty is limiting growth. When political uncertainty was not as high, as in 2007-13, private investment grew at double-digit rates.

Period	GDP	Private Investment
2024E-2025E	2.9%	2.6%
2014-2019	3.0%	-1.6%
2007-2013	6.6%	18.0%

Source: Scotiabank

“The uncertainty affecting investors – and increasingly consumers – is not only political. There is a relatively new element, at least in terms of its magnitude and potential impact on the economy: the growing illegal economy in the country, and the crime that affects both citizens and businesses. Both phenomena are expanding, and represent a growing risk for citizen well-being and economic growth,” the bank added.

In 2025, growth will be more homogeneous and depend on public investment to reverse the recession. Scotiabank projects public investment growth of 3.5% for 2025 and 11% for this year. Private investment will grow 3.3% next year.

Mining investment should grow above average by 5.4% in 2025, due to fewer social protests, government support for high-profile projects such as Tía María, and faster processing of environmental permits.