Peru central bank sees strong economic growth, limited tariff blow

By Sarah Morland and Natalia Siniawski

(Reuters) -Peru's economy likely expanded some 4% in January, the central bank's chief economist, Adrian Armas, said in a call on Friday, in line with analysts' forecasts and a day before the government is set to publish the monthly figure.

The South American nation has been bouncing back from a recession entered in 2023, when the economy contracted 0.4%. The economy grew 3.3% last year, and the government now expects to end 2025 with growth of around 4%, which would place Peru among the region's fastest-growing economies.

Armas said uncertainty over the United States' wide-ranging, on-and-off tariff announcements was creating a more volatile and uncertain global climate.

"There is fear about the future of the North American economy," he said.

However, Armas added that while Peru's manufacturing and agricultural sectors could see more impact than other industries, the effect on Peru should be limited.

"Our (agricultural) products are complementary," he said. "They enter the North American market during seasons in which there is no local production due to climate factors."

Regarding Peru's key mining sector, Armas said potential U.S. tariffs would likely not have a strong impact on the major supplier of copper, as exporters could sell the highly sought commodity in other markets.

This week, a top U.S. trade official said President Donald Trump would add copper to its trade protections, a move intended to revive local mining and refining capabilities but that analysts say could cost domestic industry dearly.

Armas spoke a day after Peru's central bank held its key interest rate at 4.75%, where it has been since the start of this year, considering it "neutral territory" while inflation indicators hover within the bank's 1% to 3% target range.

Analysts polled by the central bank late last month were more upbeat about inflation than earlier this year, Armas said, predicting that price increases would end 2025 at 2.28%, down from the 2.37% estimated in January and well within the target range.

The bank has said it will make future adjustments to its benchmark rate based on its tracking of inflation data and its derivatives.

(Reporting by Sarah Morland and Natalia Siniawski; Editing by Leslie Adler)