Peru’s financing environment benefits from favorable sovereign credit metrics, low public debt and robust external reserves that underpin market access on competitive terms. However, risks persist in corporate and credit markets. In 2025, financial institutions reported credit write-offs of around USD3.2bn in charged-off loans, reflecting stress among borrowers and potential tightening of credit availability. Insolvency proceedings and insolvency risks are emerging concerns; sectoral data indicates a rise in formal insolvency cases across trade, manufacturing and communications and lengthy backlog in proceedings that may delay restructurings. Official data also shows higher rates of formal business closures in early 2025, partly driven by administrative de-registrations and economic pressures. These trends could impede financing flows for SMEs and larger firms alike, especially if global funding costs tick up or domestic credit standards tighten. Continued fiscal consolidation and improved revenue mobilization are needed to maintain sovereign funding stability and investor confidence. 

Long-standing structural weaknesses temper Peru’s medium-term potential. Despite strong macro buffers, productivity growth has lagged due to regulatory inefficiencies and barriers to formalization that hinder SME growth and investment. OECD assessments recommend simplifying business licensing, labor and tax regulations and improving enforcement to broaden the formal tax base and enhance competitiveness. Institutional capacity at subnational levels remains uneven, constraining public investment effectiveness and project execution. Persistent informality and fragmented regulatory frameworks also raise compliance costs and reduce access to finance for smaller enterprises. Digital infrastructure and skills gaps further challenge productivity upgrades outside mining and large infrastructure sectors. Climate-related vulnerabilities – including earthquake and flood risks – require greater resilience planning to protect supply chains, particularly in agriculture and logistics. While foreign investment, especially in mining and partnerships like Chancay port, supports longer-term diversification, structural reforms to deepen value chains and innovation adoption will be critical for sustained competitiveness. 

Political uncertainty remains a central risk driver for Peru in 2026-27. Ongoing fragmentation and pre-election tensions have contributed to policy unpredictability and a slower pace of reforms. Conflicting party interests and historical patterns of executive-legislative standoffs may delay key decisions on fiscal, tax and investment policy. Fragile public approval for incumbents and past presidential turnovers amplify concerns over governance continuity. Persistent security challenges and social discontent increase the risk of protest actions that could disrupt economic activity and investor sentiment. Geopolitical positioning – balancing economic ties with China against US strategic expectations – adds complexity to foreign policy and trade dynamics. While fiscal discipline has been broadly maintained, the political environment could heighten market volatility and constrain structural reform momentum, particularly in areas requiring cross-party consensus.