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Peru: Impact of volatility on markets and economic outlook for 2025

24 December, 2024

Uncertainty in commodity markets

Peru, as one of the leading commodity exporters in the region, faces a considerable challenge in 2025 due to volatility in global markets. The prices of key commodities such as copper, gold and other metals, along with agricultural products, have shown significant fluctuations due to geopolitical tensions, slowdowns in key economies such as China and changes in international trade policies. This volatility not only directly affects the country’s fiscal revenues, but also generates uncertainty in the private sector, which depends on these markets to plan investments and establish competitive prices.

Key drivers of economic uncertainty

The economic outlook for 2025 is marked by a combination of external and internal factors that complicate recovery and sustainable growth:

External factors:

  • Global slowdown: countries such as China, which represents an important market for Peruvian exports, are showing slower growth. This reduces demand for metals and raw materials, impacting prices and export revenues.
  • Geopolitical tensions: Conflicts and changes in global trade policies, such as the energy transition, affect demand and prices for key raw materials.

Domestic factors:

  • Political and social risks: Perceptions of political instability and internal social conflicts have generated a negative impact on investor confidence. This slows private investment, affects job creation and limits economic growth.
  • Inflation: Although inflation rates have begun to moderate compared to previous years, the impact of high prices continues to put pressure on consumers and businesses in strategic sectors.

Most vulnerable sectors

The export sector is one of the most exposed in this context. Minerals such as copper, which represent an important component of Peru’s Gross Domestic Product (GDP), are subject to the dynamics of international markets. In turn, domestic consumers face higher costs in essential products due to the transmission of these increases to the local market. The impact of volatility also extends to sectors such as agriculture, especially for small producers, who depend on international prices for inputs and products.

Strategies to face the economic context

Despite the uncertainty, there are key strategies that both the public and private sectors can implement to mitigate risks:

  • Market diversification: Seek new export markets and reduce dependence on specific economies such as China.
  • Infrastructure investment: Strengthen infrastructure to improve competitiveness and attract foreign investment.
  • Financial risk management: Implement mechanisms to hedge against price volatility in international markets.
  • Incentive policies: The government should promote reforms that generate confidence and reduce uncertainty for local and foreign investors.

Prospects and the road to stability

While the economic scenario for 2025 presents multiple challenges, it also offers opportunities to strengthen the Peruvian economy through concrete measures. The key will be collaboration between the public and private sectors to implement strategies that boost investment, diversify income and protect the most vulnerable sectors.

Secure your stability in the face of uncertainty

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📞 Contact us today and protect your business against the challenges of 2025!

 

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