In a global scenario where the energy transition is on the agenda of governments and the private sector, Peru plays a key role that it can leverage for its development. “The potential is enormous for this country,” emphasized Issam Abousleiman, the World Bank’s Country Director for Bolivia, Chile, Ecuador, and Peru, during his participation in the 35th CIES Research Seminar, titled “Challenges and Perspectives for Peru and Latin America: Investment, Sustainability, and Social Cohesion.”
He noted that Peru’s economic growth potential is not 2.5%. “For us, it is nearly 6% annually, with additional growth drivers that are not yet utilized. However, necessary reforms are needed in the short, medium, and long term,” he highlighted in his presentation, “Accelerating Growth and Boosting Investments,” at the event organized by the Economic and Social Research Consortium (CIES).
“There are critical sectors for diversification, such as the digital economy, tourism, and mining; there is still much potential in the agricultural sector. These are highly significant growth drivers,” he underscored, emphasizing their relevance to economic growth in Peru.
He also stressed that decentralized growth plays a vital role in the country—a process that needs to be fully implemented, as it is currently incomplete and requires modernization. Proper decentralization could further boost economic growth in Peru by ensuring equitable development across regions.
Projects
Additionally, he highlighted that the mining sector has a pipeline of mining projects representing investments of $50 billion, and Peru can benefit from the global energy transition that demands copper. Abousleiman stated that an internal energy transition in Peru needs to be implemented and will contribute to its economic growth.
“There is so much potential that requires reforms. We hope that now, with the pandemic behind us, the government can focus on the necessary reforms,” he stressed.
Regarding decentralization, he pointed out the need to train regions, work on reforms for their implementation, and generate fiscal self-sufficiency in these regions so that the rest of the country can develop. Addressing these issues is critical for unlocking sustained economic growth in Peru.
A Crucial Agenda
In the panel “Challenges for the Peruvian Economy in 2025 in the Global Context,” Abousleiman stated that “Peru now has a great opportunity” for development. However, it must address a crucial agenda focusing on key areas such as infrastructure, education, competition regulation, productivity, and tax policy to achieve this.
“We will release a new report early next year stating that Peru needs 64 years to reach high-income country status without major reforms. However, with reforms, this timeframe could be reduced to 20 years,” the World Bank economist emphasized.
In this regard, he specified three structural issues that need attention: increasing productivity, reducing persistent territorial disparities, and improving the country’s institutional framework, which has deteriorated over the last 15 years. Tackling these structural issues will be fundamental to sustaining long-term economic growth in Peru.
Projects on Hold
Moreover, he noted that the work carried out by the World Bank, the Inter-American Development Bank (IDB), and the Development Bank of Latin America and the Caribbean (CAF) shows that 40% of public projects in the country remain unfinished.
“This represents a tremendous cost. These projects should accelerate growth but must also boost productivity,” he emphasized.
He stated that the World Bank, in collaboration with the IDB and CAF, is supporting Peru’s Ministry of Economy and Finance (MEF) with recommendations, including public-private partnerships (PPPs), to make the public investment system in Peru more efficient. Such measures are vital to driving economic growth in Peru.
However, he noted that while efforts are being made to improve public investment, private investment remains the most crucial for the country as it accounts for 90% of jobs, 70% of production, and 75% of investment.
“Where will most jobs and growth come from if the private sector does not function well? This is a very important issue for the country,” he stressed.
He added that nearly $60 billion per year is needed to close the infrastructure gap alone, and this will not come from the public sector, which does not have these funds. He also emphasized the critical role of private investment in the economy, emphasizing that strengthening private investment frameworks is key to sustaining economic growth in Peru.
Macroeconomic Fundamentals
For his part, Guillermo Díaz, CAF’s Country Economist for Peru and Chile, highlighted Peru’s economic resilience in facing external shocks, thanks to its strong macroeconomic fundamentals. However, he warned, “These are not set in stone and therefore need to be protected, as they can erode.”
“This was achieved through sound and appropriate monetary and fiscal policies over the past two and a half decades, which allowed for an average annual growth rate of 4.5% over the last 25 years—a track record that very few countries can claim,” he said.
“We must recognize that private investment is the main driver of growth and formal job creation in the country. Peru must restore the investment climate that previously fostered such growth,” Díaz added.
He also emphasized Peru’s opportunities in the energy transition. “There can be no green transition without copper, and we have copper,” he stated. These opportunities underscore the importance of strategic planning for economic growth in Peru.
Foreign Investment
Tomás Lopes-Teixeira, IDB’s representative in Peru, pointed out that in addition to its macroeconomic fundamentals, Peru has opportunities for “external investment shocks” in transportation infrastructure, including ports, integration routes, and the new Jorge Chávez International Airport, which will better connect Peru to the world.
He also highlighted the need to improve the low productivity of micro and small enterprises (SMEs), promote financial inclusion, conserve the Amazon, and strengthen public safety.
Additionally, he underlined the importance of Peru’s critical minerals, such as copper and others, for electric vehicles and lithium batteries. “Peru has an opportunity to integrate into the world as a major leader and hub for the energy transition,” Lopes-Teixeira noted, further linking these developments to the broader context of economic growth in Peru.
Regional Focus
Renowned economist Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University in the United States, also participated in the 35th CIES Seminar with his presentation, “Facing the Challenges of Sustainable Development in Peru and Latin America.”
Sachs emphasized that Peru’s approach to development should adopt a regional or continental focus. “A basic challenge for Peru, or any country, is that advancing sustainable development requires a regional, even continental, approach,” he said.
He also noted that Mercosur “cannot remain a group of five countries east of the Andes. It must establish stronger Latin American regional cooperation with a future-oriented vision.”
Sachs further stressed that regional cooperation in Latin America should focus on renewable energy sources, such as wind and hydroelectric power while ensuring the conservation of the Amazon.
Meanwhile, Liliana Rojas-Suárez, Senior Researcher and Director of the Latam Initiative at the Center for Global Development, highlighted in her keynote speech that international investors perceive Peru as a country that has managed to control high levels of inflation, providing security and confidence in its monetary policy.
“Despite experiencing hyperinflation in the early 1990s, Peru is now a country where no one doubts its ability to control inflation. This credibility is significant,” Rojas-Suárez stated.
Key Data
Peruvian exports are expected to reach $70.3 billion by the end of 2024, representing an 8.8% increase compared to 2023, driven by mining, agriculture, and fishing, according to the Lima Chamber of Commerce (CCL). Exports totaled $60.2 billion from January to October this year, 14.5% higher than the same period in 2023, according to the Ministry of Foreign Trade and Tourism (Mincetur). This increase is attributed to higher export volumes (6.4%) and improved prices (7.9%), with notable growth in the fishing (26.6%), agricultural (23.3%), and metallic mining (15%) sectors.
In conclusion, the discussions and insights from the 35th CIES Research Seminar highlight Peru’s tremendous economic growth opportunities. With untapped potential across sectors like mining, agriculture, tourism, and the digital economy, combined with critical resources for the global energy transition, Peru is well-positioned to leverage its strengths for sustained development. However, achieving nearly 6% annual growth will require strategic reforms in infrastructure, education, public and private investment efficiency, and regional decentralization. By addressing these challenges and fostering a robust investment climate, Peru can transform its economy, accelerate progress toward high-income status, and cement its role as a leader in Latin America’s sustainable development.