Peru Country Risk Rating

Peru remains medium risk rating overall, with political instability remaining the principal constraint. Political violence is medium-high, political interference is medium-high and legal & regulatory risk remains high. Keiko Fujimori was sworn in as president on July 28 after one of the closest elections in Peru’s modern history, defeating leftist Roberto Sánchez by a narrow margin. International observers did not substantiate fraud claims, but the disputed result, protests and the continuing polarisation around the Fujimori name underline the fragility of the political environment. Fujimori’s Popular Force is the largest bloc in the newly restored bicameral Congress but does not hold an outright majority, meaning coalition-building will be essential. Peru has now had ten presidents since 2016, and repeated clashes between presidents and Congress remain a core institutional risk. Fujimori has promised fiscal discipline, tougher action on crime and a more business-friendly approach, including efforts to accelerate delayed mining investment.

Economically, conditions are more supportive than the political backdrop. The IMF expects GDP growth of about 2.8% in 2026, while the central bank has raised its own projection to around 3.4% on stronger domestic demand and private investment. High copper and gold prices are supporting export earnings, and the current account remains in surplus. Inflation is expected to settle near 2.5% by year-end after temporary energy-related pressure. Supply-chain disruption is rated medium, reflecting exposure to mining stoppages, road blockades and severe weather. Congress approved a USD2.8 bln supplementary budget in July to finance infrastructure, salaries, crime prevention and preparations for El Niño, although the fiscal council warned that the additional spending reduces room to rebuild buffers. The risk of doing business is medium, banking-sector vulnerability and the government’s inability to provide stimulus are medium-low, while sovereign non-payment risk is medium and exchange transfer risk is low. Public debt remains modest by regional standards at roughly one-third of GDP, reserves are substantial and the sol is freely convertible. Renewed political instability, however, social conflict around mining or excessive fiscal loosening could quickly undermine investor confidence.