Peru

Resilient growth despite uncertainty in domestic and external conditions

Economic growth made a sweeping comeback in 2024 on back of a broad-based recovery in domestic demand and favourable external conditions. Business and consumer confidence improved. Declining inflation and rising real incomes supported household spending throughout the year. Investment gained strength, supported by improved credit conditions and political stability, and a solid rebound in capital goods imports.

In 2025, Peru's growth is expected to continue at a moderate pace, driven once again by resilient domestic demand. Private consumption, which accounts for 66% of GDP, will remain the main driver of growth, supported by strong labour market conditions, higher wages – including the recent increase in the minimum wage – and subdued inflation, all of which boost household purchasing power. Investment will also remain dynamic, bolstered by favourable business sentiment, rising FDI in the mining, communications, and energy sectors, and improved project execution prospects. However, growth will decelerate, mainly due to the global economic slowdown, which is being exacerbated by US President Trump’s foreign trade policy. This policy is likely to trigger retaliatory measures, inflate prices, and disrupt global supply chains, affecting business confidence and investment decisions worldwide. Despite these challenges, strong copper and gold production, as well as rising agricultural and seafood shipments, will allow net exports to make a significant contribution to growth, complementing the domestic recovery and helping to offset the potential drag from weaker fiscal support. Tourism is expected to perform well, driven by initiatives such as the “Pueblos con Encanto” programme, which promotes rural tourism and sustainable practices. Moreover, the agriculture sector will benefit from increased exports of non-traditional products such as cocoa and coffee.

Solid external position and fiscal consolidation ahead

The current account surplus in 2024 improved considerably due to favourable terms of trade, supported by a still strong trade balance, amid robust mining and agriculture exports, surging fishmeal sales, and subdued import growth for most of the year, despite a gradual recovery in domestic demand. The services deficit narrowed further, benefiting from a steady recovery in tourism, while lower freight costs helped stabilise services imports. In 2025, the current account surplus is expected to decline moderately, reflecting a narrowing trade surplus as import growth accelerates alongside robust domestic consumption. Mining exports especially for copper, which account for 40%, will remain robust but will be partly offset by rising imports of consumer and capital goods. At the same time, the primary income deficit will widen due to increased repatriation of profits by foreign companies, while the secondary income surplus is expected to remain stable, supported by steady remittance inflows. Foreign direct investment (3% of GDP) is expected to increase further, particularly in the extractive, financial and communications sectors, strengthening Peru's already solid external position. With foreign exchange reserves remaining ample (covering 18 months of imports in March 2025) and external debt (56% held by the private sector) on a downward trend, reaching 37% of GDP in 2024, external vulnerabilities are limited, and Peru is well positioned to withstand potential external shocks.

On the budgetary front, the deficit widened in early 2024, primarily due to increased public spending aimed at supporting economic recovery, but began to retreat towards the end of the year, supported by stronger tax revenues and still subdued expenditure growth. The rebound in private consumption and improved labour market dynamics boosted VAT and income tax collections, while infrastructure-related spending continued to weigh. For 2025, the deficit is expected to narrow further, although it is likely to remain above the legal ceiling of 2.2% of GDP. Revenue performance should continue to improve on the back of strong domestic demand, higher copper prices and higher formal employment. However, ongoing public spending, particularly on infrastructure and public wages, will keep expenditure elevated.

Instability in a politically fractured landscape

Following the failed self-coup of previous President Pedro Castillo in December 2022, Peru has slowly emerged from one of its most serious political crises in decades. His Vice-President Dina Boluarte has held the presidency since then, but her government continues to face historically low approval ratings (3% in March 2025) and persistent institutional fragility. Nevertheless, 2024 was marked by relative social calm, aided by improving economic conditions, notably falling inflation and a rebound in employment and investment, all of which helped to reduce the intensity of anti-government mobilisations.

Boluarte's shift to the right and her alliance with centrist and conservative forces in Congress have provided short-term stability and protected her from impeachment attempts by the left. But this alliance remains fragile given the deep fragmentation and opportunism of Peruvian politics. As the April 2026 general elections approach, the gap between the population, on one side, and the deeply unpopular executive and the distrusted Congress on the other could widen, especially if economic momentum slows or social pressures such as crime, inequality or extreme weather intensify. This has been exacerbated by the reintroduction of a bicameral legislature, with a 60-seat Senate adding to the 130-seat Chamber of Deputies, and the possibility for congress people to be re-elected indefinitely after 2026, changes that were rejected by referendum in 2018. A scenario in which Boluarte does not complete her term of office cannot be ruled out, but Congress' own interest in avoiding early elections (given that members were previously banned form immediate re-election) may act as a stabilising factor.

Looking ahead, political discourse is likely to be dominated by security concerns, with right-wing candidates leading early polls on tough-on-crime platforms. Internationally, Peru will maintain pragmatic relations with key partners such as the US and China, despite ongoing tensions with left-leaning governments in the region that continue to challenge the legitimacy of the current government. Additionally, over 40 parties intend to take part in the next elections, reflecting the highly fragmented political landscape.

Payment

Electronic payment is prefered for both high-value and low-value transactions. Post-dated cheques are commonly issued in?Peru. Credit transfers are used for both high-value and low value payment transactions. The majority of low-value electronic credit transfers in Peru continue to be made between accounts in the same bank, known as intrabank or “on-us” transactions. Bills of exchange are a commonly used payment instrument for debt collections.

Debt Collection

The Peruvian judicial system is structured hierarchically. The Corte Suprema (Supreme Court) is the highest court, followed by courts that specialise in civil law, criminal law, constitutional law and labour law. These sit above the Corte Suprema in each judicial district, which deal with civil and commercial law cases. The Juzgados Especiales (specialised judges) are located in major cities in the country and deal with matters concerning, among others, civil and commercial law. Following this is the professional Juzgados de Paz (peace judges), located in major cities, and in charge of low economic value cases and other minor issues. Finally, Cortes de Paz (peace courts) are located in cities with lower populations, comprised of one judge who may or may not have the status of lawyer.

Amicable phase

The amicable phase in Peru is characterised by phone calls, written reminders, visits, and meetings, with the goal of settling the debt between two parties without triggering legal proceedings.

Legal proceedings

Conciliation Proceedings

Prior to judicial proceedings, Peruvian law requires of a conciliation process in order to reach a debt settlement agreement. The process constitutes two hearings, if an agreement cannot be reached, the proceeding ends, and both parties have to sign a conciliation act, which is then presented at the beginning of the judicial process.

Fast-track proceedings

The below text makes reference to the Unidad de Referencia Procesal (Unit of Procedural Reference), which is a reference value according to Peruvian law: each URP is 10% of the Unidad Impositiva Tributaria (UIT), which can be used in tax regulations to determine tax bases, deductions, limits of affectation and other aspects of taxes that the legislator deems appropriate. It may also be used to apply sanctions and to determine accounting obligations, The UIT is set at the beginning of the year by the Economic Ministry.

Two fast-track proceedings are available in Peruvian law:simplified proceedings (proceso sumarisimo) concern cases which the value is below URP 100. Juzgados de Paz have jurisdiction for amounts between URP 50 and 100. Defendants have five days to file a dispute after they received the notification from the judge. Within 10 days, the judge organises hearing for discovery, conciliation, evidence and judgment;shortened proceedings (proceso Abreviado) concern cases in which the value is between URP 100 and 1,000. Juzgados de Paz have jurisdiction for amounts between URP 100 and 500 and Juzgados Civiles have jurisdiction in cases for amount above URP 500. The defendant has 10 days to file a dispute from the admission of the petition by the judge. Discovery and conciliation will be examined during one hearing. If the conciliation was not successful, the judge mentions the disputed points and evidence to be provided or updated. Within 50 days of the conciliation hearing, the judge sets up an evidence hearing.

Executive proceedings

When creditors are owed an undisputed and certain debt, they can start executive proceedings. The debtor has five days from the notification to submit his defence. The judge will render a judgment, after which each party has up to three days to file an appeal.

Ordinary proceedings

Ordinary proceedings apply to cases with a value of over URP 1,000. The plaintiff sends a written petition to the court. The defendant can file a defence expressing the facts on which he intends to argue, within 30 days from the service of the writ. If the claim is complete (i.e.?includes all the relevant information), the judge sets up a hearing for conciliation. If the parties reach an agreement, it has the same effect as a judgment. If an agreement is not reached, the judge organises a hearing within 50 days of the conciliation hearing. The proceedings end when the judge delivers his or her decision. The length of proceedings depends mainly on the nature of the conflict, the number of parties involved, the complaints that occur, and the caseload of the judge in charge of the process. Based on these criteria, a first-instance judgment in a typical commercial litigation case may take approximately twelve to 18 months.

Enforcement of a Legal Decision

A domestic judgment becomes final and enforceable once all venues for appeal have been exhausted. The first instance judge is in charge of enforcing judgments, and will issue a writ of execution ordering the relevant party to comply with the judgment within five working days. If the order is not complied with during the five-day period, the judge must order the seizure of the debtor’s assets in order to sell them at auction. For foreign awards, creditors located in Peru must file a claim before the Superior Court located in the debtor’s place of domicile. The Court will consider whether the foreign judgment is compatible with Peruvian law and any international treaties between the two countries. If it is found to conform, the judge shall authorize the enforcement of the judgment in the Peruvian Jurisdiction.

0

Insolvency Proceedings

The Instituto Nacional de Defensa de la Competencia y de la Proteccion de la Propriedad Intelectual (INDECOPI) is the specialized administrative agency that deals with insolvency proceedings.

0

OUT-OF-COURT PROCEEDINGS: PREVENTIVE PROCEEDING

Preventive proceedings aim to provide a forum for debtors to reach a consensual restructuring agreement with their creditors. It is intended to be a fast track process that only debtors can initiate.

The PARC was created by Indecopi to prevent the insolvency and bankruptcy of those companies that, because of the health emergency caused by the coronavirus pandemic, lack liquidity to meet their obligations. This procedure is regulated in Legislative Decree No. 1511 and its Regulations.

With this bankruptcy procedure, Indecopi offers an alternative that seeks to reschedule the unpaid obligations of the rated entity, avoid its insolvency, the loss of business and sources of employment and, with this, contribute to the recovery of credit and continuity in the chain of payments in the national economy.

Joining the PARC is very simple, fast and safe, since the entire procedure is carried out virtually.

REORGANISATION

If creditors decide to allow their debtors to restructure, they will be asked to approve a reorganisation plan within 60 days from the decision to proceed with reorganization. Both the decision to reorganise and the organisation plan must be approved by more than 66.6% of the allowed creditor claims. During the process, creditors decide whether to allow the debtor’s management, to continue operating the business, or to replace the debtor’s management. Once the reorganisation plan is approved and all the pre-publication claims are paid according to their terms, then INDECOPI grants a decision declaring the formal conclusion of the reorganization proceeding.

0

LIQUIDATION

If the creditors decide to liquidate, then a liquidator will be appointed at the Creditors’ Meeting from the list registered with INDECOPI or under La Ley General de Sociedades 26887. The will be asked to approve a liquidation plan for the debtor and decide whether the debtor should be authorized to continue its business during the liquidation. Whether voluntary or involuntary, the liquidator must follow a mandatory order in the payment claims. To conclude the liquidation process, the liquidator files a petition before the Public Registry in order to register the extinction of the company. However, if creditors remain unpaid, then the liquidator must file a petition before a civil judge to obtain a judicial bankruptcy declaration.

Last updated: April 2025