Optimistic projections for private investment in Peru face key challenges.

The recent report from the Ministry of Economy and Finance (MEF) has shed light on projections for private investment in the country, which is expected to grow by 2.5% this year and 3% next year. This increase is based on the progress of mining project execution and the initiation of new constructions, in a context where investments had experienced significant declines in the previous two years. The mining sector, one of the pillars of the Peruvian economy, is shaping up to be the engine of this growth. Expectations are optimistic, with a projected increase of 5.5% in mining investment for 2024 and 3.5% for 2025. Projects such as San Gabriel, Chalcobamba I, and the expansion of Toromocho are on the horizon, along with other significant plans that could add billions of dollars to the national economy. However, the reality is more complex. Luis Miguel Castilla, director of Videnza Instituto, emphasizes that the growth in investment is not enough to offset the investment losses from previous years. In his view, it is crucial for the project portfolio to broaden its scope to stimulate more robust growth. Despite the optimism, the projected growth rates are not satisfactory for aspiring to sustainable and accelerated economic development. Eduardo Jiménez, head of the Information System at Macroconsult, also points out that private investment is constrained and not growing at the desired pace. This stagnation is attributed to a lack of confidence in the political and economic environment, especially in the context of the upcoming general elections in 2026, which generate uncertainty among investors. Ongoing projects, both in mining and infrastructure, are characterized by their long-term nature. Castilla mentions that many of these initiatives require several years to be completed, and although their initiation is positive, it does not provide an immediate boost to investment. Projects like Tía María, which require at least five years of construction, are examples of this dynamic. Business confidence is another critical factor for investment growth. Martín Valencia, head of Economic Studies at the Peruvian Institute of Economy, highlights that despite some improvements in confidence, the outlook remains uncertain. The elections of 2026, scheduled for April with a possible second round in June, are generating caution among investors, which could limit the growth of private investment in the coming years. Projections for medium-term economic growth also require deeper analysis. Valencia notes that the estimated growth of 3% between 2025 and 2028 will depend on a series of factors, including fiscal consolidation and the promotion of private investment. This implies a coordinated effort to foster a favorable business climate that encourages investors. The projected fiscal deficit by the MEF for 2025, estimated at 2.2%, must be managed carefully. Jiménez mentions that the regularization of revenues from the mining sector will be fundamental to achieving this goal. However, there is a consensus among experts that the current administration is shifting the responsibility for fiscal consolidation to the next government, which could complicate the country’s financial situation in the medium term. As we move towards an uncertain future, it is evident that private investment in Peru faces significant challenges. While there are signs of growth, it is essential for economic policymakers to establish a more predictable and attractive environment for investors. The articulation of effective policies that promote competitiveness and productivity will be key to ensuring that the country can make the most of its resources and economic development potential. In conclusion, although the MEF's projections are encouraging, experts warn that work must be done on multiple fronts for private investment not only to recover but also to expand sustainably in the future. The path towards solid and consistent growth is filled with challenges, but also opportunities that, if managed appropriately, could transform the Peruvian economy in the years to come.