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Unrest in Peru could dent growth, IMF says, suggests temporary stimulus

By Brendan O’Boyle

(Reuters) – Peru’s economic outlook is “very uncertain,” but strong economic fundamentals could Buffering the prevailing risk said on Thursday after an annual visit to the country.

The IMF staff visit comes as political and social unrest has shaken confidence in Peru’s economic resilience.

“Key domestic risks include heightened political uncertainty, social unrest from political developments, and natural disasters, which could dampen economic activity and put at risk planned medium-term fiscal consolidation,” The International Monetary Fund said in a statement.

The roadblocks and protests that led to the ouster and arrest of then-President Pedro Castillo in December cost Peru millions of dollars in damages and lost revenue.

“Recent political developments suggest that the government needs to work on the political spectrum to restore confidence,” the IMF said. The IMF acknowledged that Peru retained “very strong fundamentals and An institutional policy framework that underpins the economy’s resilience against external and domestic shocks.

The IMF says inflation is Peru’s most pressing policy challenge and says the central bank’s “data-driven approach remains appropriate.”



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