The Peruvian economy grew by 3.33% in 2024, according to the latest report from the National Institute of Statistics and Informatics (INEI). This growth, while positive, fell short of expectations due to a lack of private investment. The economy could have grown more, reaching up to 4%, had there been better performance in sectors such as construction, manufacturing, and mining.

The sectors that significantly contributed to the economic growth included other services, manufacturing, and commerce. The manufacturing sector recorded a 3.9% growth compared to 2023, driven by the primary manufacturing subsector, which increased by 8.6%, and the non-primary subsector, which grew by 2.5%. The commerce sector experienced a 3% growth, with notable contributions from retail trade (+3.3%), wholesale (+3.2%), and the automotive sector (+0.2%).

The fastest-growing sectors in 2024 were fishing and transportation, storage, mail, and messaging. The fishing sector led with a 24.9% growth, driven by a 30.1% increase in the tonnage captured of maritime species, although this was partially offset by a 14.6% drop in continental fishing. This performance reflects a recovery from a 21.3% decline in 2023, highlighting the sector’s vulnerability to climatic factors and external conditions.

The transport, storage, mail, and messaging sector registered an increase of 6.1% compared to 2023, reflecting greater demand in logistics and distribution. This growth aligns with the broader economic recovery and increased trade activity, similar to the post-pandemic economic rebound seen in the U.S. in 2021.

The financial and insurance sector, along with telecommunications and other information services, showed less performance. The financial and insurance sector registered a 1.6% drop due to international commercial tensions. The telecommunications sector, however, saw a 2% growth, driven by a 2.1% increase in the telecommunications subsector and a 1.4% increase in other information services. The participation of this sector in the national GDP has tripled in the last 30 years, according to a report of the Peruvian Institute of Economics (IPE).

Key Scenario

The construction sector grew by 3.6% in 2024, marking a recovery from a 7.9% fall in 2023. This recovery was driven by a 12% increase in public investment, reflected in the advancement of physical works. However, private investment remained insufficient, with a 2.4% projection at the end of the year, as evidenced by marginal growth of 0.2% in internal cement consumption. As in the U.S., public investment in infrastructure can significantly boost economic growth, but private investment is crucial for sustained development.

The mining and hydrocarbons sector grew by 2%, with notable dynamism in the first quarter (+7.5%) but a negative closure in the fourth quarter (-0.8%). Gold and silver production increased in regions like Lima, Apurímac, and Libertad. However, the sector showed volatility and failed to sustain its 2023 performance, when all quarters showed growth. This volatility is reminiscent of the fluctuations seen in the U.S. energy sector, where market conditions and regulatory changes can significantly impact performance.

The Peruvian economy could have grown up to 4% with better performance in the construction and manufacturing sectors, and even reach 5% if mining and hydrocarbons maintained its 2023 level. However, the lack of greater private investment, associated with uncertainty and political instability, as well as labor overruns and excessive state bureaucracy, limited growth potential. This scenario is not unlike the challenges faced by the U.S. economy, where political instability and regulatory burdens can hinder economic growth.

2025 is a pre-election year in Peru. The Executive must focus on generating confidence in markets, especially in manufacturing, construction, and mining, key sectors to boost economic dynamism. Recent Ministry of Economy and Finance (MEF) ads around a shock Deregulator and possible fiscal incentives are a first positive step, but the effectiveness of these measures will depend on their correct application and execution. This approach mirrors the U.S. government’s efforts to stimulate economic growth through deregulation and fiscal policies.