Peru’s strong economic growth over the past two decades has already boosted incomes and living standards. To continue its growth trajectory, Peru needs to maintain strong public finances, unlock its human capital potential, and improve the business environment, especially for smaller firms, according to a new OECD report.
The latest OECD Economic Survey of Peru projects GDP to grow by 2.8% this year and 2.6% in 2026. With inflation within the Central Bank’s target band of 1-3%, monetary policy should stay broadly neutral, and data-driven to guard against global and domestic risks to price stability.
Looking ahead, the challenge is to boost resilient and inclusive growth while maintaining strong public finances. Restoring compliance with the fiscal rule would preserve the country’s strong macroeconomic framework and safeguard investor confidence. Reforms to improve public spending efficiency and optimise revenues by broadening the tax base and reducing evasion would create space for productivity-enhancing and necessary social investments.
“Peru can strengthen the foundations for long-term growth by enhancing workforce skills, boosting small businesses’ access to finance, encouraging formal job creation and accelerating climate adaptation,” OECD Secretary-General Mathias Cormann said, presenting the Survey in Lima alongside Peru’s Prime Minister Eduardo Arana Ysa, Minister of Foreign Affairs Elmer Schialer Salcedo, and Minister of Economy and Finance Raúl Pérez-Reyes. “Financing necessary investments in infrastructure, education, social protection, and climate change adaptation and mitigation will require better spending efficiency and strong fiscal institutions to safeguard public debt sustainability.”
The Survey finds that high informality and weak learning outcomes are holding back Peru’s potential to drive formal job creation and growth. A comprehensive strategy to promote formal jobs is needed, including better skills, lower social security contributions for low-income workers, simplified employment and businesses regulations, and stronger enforcement of tax and labour laws. Strengthening the rule of law is key to ensure these reforms are implemented effectively.
Investing in human capital will be important. Expanding high-quality early childhood education and care, especially for lower-income families and in rural areas, would lift learning outcomes and ease care responsibilities for women, allowing more of them to take up formal and better-paid work. Strengthening vocational education and training would also unlock formal job opportunities for youth.
Limited access to finance is hurting investment and the transition to a more resilient and inclusive economy. Credit penetration remains low, and micro, small, and medium-sized enterprises (MSMEs), which make up the large share of the business sector, struggle to access affordable credit. Reforms should focus on lowering financing costs, developing alternative funding sources tailored to the needs of MSMEs and deepening capital markets.
Peru is highly vulnerable to climate change and has pledged to reach net-zero emissions by 2050, but reducing emissions and building resilience will require ambitious action. Halting deforestation, and expanding renewable energy and low-emissions transport, while strengthening adaptation policies, would enhance environmental resilience and support sustainable growth.
See the Overview of the Economic Survey of Peru with key findings and charts (this link can be used in media articles).
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Peru is one of eight candidate countries (the other seven being Argentina, Brazil, Bulgaria, Croatia Indonesia, Romania and Thailand) undergoing the accession process to the OECD. On 25 January 2022, the OECD Council decided to open accession discussions with Peru and the Accession Roadmap setting out the terms, conditions and process for accession was adopted on 10 June 2022. In accordance with this Roadmap, 24 OECD technical committees, composed of expert policymakers from each of the 38 OECD countries, are conducting an in-depth assessment of Peru’s legislation, policies and practices against OECD legal instruments and OECD best policies and practices, covering almost every area of government policy, including economic policy, labour market and social policy, education, and health. These reviews can result in recommendations for changes to Peru’s legislation, policies and practices, and support Peru in identifying how it can deliver better results for its people.
The overarching objective of the accession process is to promote convergence of Peru with OECD standards, best policies and best practices, resulting in better outcomes for OECD members as well as for Peru and its citizens. Throughout the accession process, the OECD will work closely with Peru to support the adoption of long-lasting reforms for this purpose.
This Economic Survey will feed into the accession review of Peru by the Economic Development Review Committee (EDRC), one of 24 OECD committees that are conducting an accession review of Peru in accordance with the Accession Roadmap.
Beyond accession, the OECD also engages with Peru, as with other non-Member countries, through country-specific projects. This engagement takes various forms such as country-specific policy reviews, integration of relevant data series in OECD databases, benchmarking exercises, and adherence to OECD instruments.
Peru also actively engages in the OECD Latin America and Caribbean Regional Programme, which supports the LAC region in advancing its reform agenda along four key priorities of the region: increasing productivity, enhancing social inclusion, strengthening institutions and governance, and ensuring environmental sustainability. It hosts the OECD Regional Centre for Competition in Latin America in Lima, which provides capacity building assistance and policy advice across Latin America through workshops, seminars and training programmes on competition law and policy for officials in competition enforcement agencies, sector regulators, and other parts of government.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.