Optimistic projections for private investment in Peru face political uncertainty.

The recent publication of the Multiannual Macroeconomic Framework 2025-2028 by the Ministry of Economy and Finance (MEF) has generated expectations about the growth of private investment in the country. According to the report, a 2.5% increase is estimated for this year and a 3% increase for the next. Among the factors supporting this growth are advancements in mining projects and the construction of new infrastructures, an incentive that could mark a change in the trend of recent years. Despite the optimistic outlook presented in the projections, it is important to remember that this rebound comes after two years of significant declines in private investment, with a decrease of 0.4% in 2022 and 7.3% in 2023. Luis Miguel Castilla, director of Videnza Instituto, emphasizes that while it is positive that investment is on the rise, the estimated figure is insufficient considering the magnitude of the project portfolio that could have been realized. The projected growth for private investment is supported by large-scale mining projects such as San Gabriel and Chalcobamba I, as well as the expansion of significant operations like Toromocho and Cerro Verde. It is expected that by 2024 and 2025, mining investment will grow by 5.5% and 3.5% respectively, highlighting the importance of the mining sector in the Peruvian economy. However, despite these anticipated increases, there remains a sense of caution among investors. Eduardo Jiménez, head of the Macroconsult Information System, warns that private investment is constrained and that business confidence has not yet fully recovered. This scenario is exacerbated by the political context, with the general elections of 2026 on the horizon, generating uncertainty in investment plans. Economist Martín Valencia points out that projects in mining and infrastructure require long-term confidence. The construction of large projects, such as the controversial Tía María, can take more than five years, meaning that any boost to investment will not materialize immediately. The proximity of elections could lead investors to be cautious and delay key decisions, which could negatively impact growth. The analysis of investment and economic growth projections also highlights the need for greater promotion of private investment, as well as a renewed focus on the National Competitiveness and Productivity Plan. This approach could facilitate an increase in productivity and, consequently, in economic growth rates, something that is urgently needed in the current landscape. Additionally, the MEF projects a fiscal deficit of 2.2% for 2025, partly driven by the regularization of revenues from the mining sector. However, both Castilla and Jiménez agree that the current administration is delegating the responsibility of achieving fiscal consolidation to the next leaders of the country, which does not inspire confidence in the immediate future. With a projected annual growth of 3% between 2025 and 2028, the country will need a joint effort to attract and retain private investment. This includes not only improving conditions for doing business but also ensuring a stable and predictable regulatory framework. The political uncertainty surrounding the 2026 elections, along with the history of recent economic instability, could be a significant obstacle to long-term economic growth. Ultimately, the combination of long-term projects in mining and infrastructure, the political context, and the need to restore business confidence will determine the future of private investment in Peru. As the government seeks sustained growth, it will be vital to implement effective strategies to foster an investment culture that overcomes current distrust and allows the country to reach its true economic potential.