Coastal El Niño would cut 0.9 percentage points from Peru's GDP growth in 2026 and 1.1 points in 2027, about 2 points over two years, according to projections by the Central Reserve Bank of Peru (BCRP) reported by El Comercio. Even so, its president, Julio Velarde, said on Wednesday, November 4, at the Latin American Banking Federation (Felaban) assembly in Lima that the effect will be temporary and that the economy enters it with solid domestic demand. "It is a temporary thing, yes, but it will affect all of us," he said, according to Andina.
Outlets such as RPP and Perú 21 reported that Velarde ruled out a recession because of the economy's strength. "Demand is very strong," he said while reviewing employment, investment and construction data, according to Infobae. This article gathers the BCRP figures, the hardest-hit sectors and what lies ahead with the event, which ENFEN keeps at extraordinary magnitude. The climate details are in our article on extraordinary coastal El Niño and the regions at risk.
How much El Niño would cost Peru's GDP
In its September Inflation Report, the BCRP raised the estimated negative impact of El Niño on 2026 GDP from 0.7 to 0.9 points, and on 2027 from 0.9 to 1.1 points. As a result it cut its growth forecast from 3.4% to 3.2% for this year and from 3.2% to 3.0% for next year, El Comercio reported. "It is going to be a strong El Niño and we estimate it will indeed have a significant effect," Velarde said at the time.
View the data as a table
| Impact on 2026 GDP | 0.9 points |
| Impact on 2027 GDP | 1.1 points |
| Cumulative impact 2026-2027 | 2.0 points |
| Projected 2026 growth | 3.2% |
| Indicator | June 2026 report | September 2026 report |
|---|---|---|
| El Niño impact on 2026 GDP | −0.7 points | −0.9 points |
| El Niño impact on 2027 GDP | −0.9 points | −1.1 points |
| 2026 GDP growth | 3.4% | 3.2% |
| 2027 GDP growth | 3.2% | 3.0% |
| 2026 domestic demand | 5.9% | 6.2% |
| 2026 private investment | 12.5% | 14% |
Source: BCRP, Inflation Report, via El Comercio. The "up to 2%" in headlines is the sum of both years, not a contraction: the BCRP still forecasts positive growth in 2026 and 2027. Other estimates, such as insurer Rimac's, also point to about 2 points less growth over two years.
View the data as a table
| 2026 GDP | 2027 GDP | 2026 domestic demand | |
|---|---|---|---|
| June 2026 | 3.4% | 3.2% | 5.9% |
| September 2026 | 3.2% | 3.0% | 6.2% |
Why Velarde rules out a recession
The BCRP's argument is that the economy had momentum before the event. Velarde cited 6.5% job growth in recent months, a 10.6% rise in private investment in the second quarter and close to 13% growth in cement consumption in the latest data, according to Infobae. In September he had said that, without El Niño, several indicators would be consistent with growth close to 6%, El Comercio recalled.
Economy Minister Elmer Cuba projects 3.4% growth for 2026, above the BCRP, and exports of more than US$100 billion by year-end, according to Gestión. Exports reached a record US$83 billion between January and September, compared with US$90.082 billion in all of 2025, according to Gestión. Some outlets published projections of up to US$120 billion, a figure we did not find in the MEF's official statements.
| Indicator | Figure | Source |
|---|---|---|
| Employment (recent annual change) | +6.5% | Infobae |
| Private investment, Q2 2026 | +10.6% | Infobae |
| Exports, January-September 2026 | US$83 billion | Gestión |
| Exports, full year 2025 | US$90.082 billion | Gestión |
| 2026 growth according to the MEF | 3.4% | Gestión |
| 2026 growth according to the BCRP | 3.2% | El Comercio |
The sectors El Niño hits hardest in Peru
According to the BCRP, in 2026 fishing would fall 30.7%, primary manufacturing 7.1% and agriculture 1.5%; primary GDP as a whole would drop 2.3%, more than the 1.6% forecast in June. For 2027 it expects a rebound in fishing (10.6%) and primary manufacturing (9.1%), but another fall in agriculture (1.7%) because of the impact on coastal fruit crops, according to El Comercio.
Warm seas have already hit anchovy: the Production Ministry closed the first north-central season on August 21, after IMARPE found 65% juvenile fish, La República recalled.
Inflation, fuel and interest rates
Velarde also warned that rising fuel prices make it harder for inflation to fall: "The price of diesel is at a level as if oil were at 200 dollars (a barrel)," he said, according to Andina. National inflation was 4.83% in the 12 months to October and Metropolitan Lima's 5.25%, according to INEI data cited by La República. The BCRP keeps its policy rate at 4.25% and has not ruled out a hike. More in our article on Lima's October inflation.
| Indicator | Figure | Source |
|---|---|---|
| National inflation, 12 months to October | 4.83% | INEI, via La República |
| Lima inflation, 12 months to October | 5.25% | INEI, via La República |
| Fuel and lubricants, 12 months | +44.92% | INEI, via La República |
| BCRP policy rate | 4.25% | El Comercio |
| Projected inflation at end-2026 | 4.2% | BCRP, via El Comercio |
The event's calendar shapes the coming months: between November 2026 and January 2027, above-normal rainfall is expected on the northern and central coast and in the western highlands, with high flows in the Tumbes, Chira, Piura, La Leche and Jequetepeque rivers. ENFEN expects coastal El Niño to remain extraordinary until February and to weaken toward June 2027, according to La República.
- Aug 21, 2026Anchovy season closedProduce ended the first north-central season: 65% juveniles.
- Sep 2026BCRP cuts its forecast2026 GDP from 3.4% to 3.2%; El Niño upgraded from strong to extraordinary.
- Nov 4, 2026Velarde at Felaban"It is a temporary thing, yes, but it will affect all of us".
- Nov 2026 - Jan 2027Above-normal rainfallNorthern and central coast and western highlands; Tumbes, Chira and Piura rivers.
- Feb 2027Extraordinary magnitudeENFEN expects it to last until February.
- Mar - Apr 2027Inflation back within targetBCRP estimate, subject to El Niño's intensity.
- Jun 2027El Niño weakensGradual decline according to ENFEN.
Frequently asked questions
How much would El Niño cut from Peru's GDP?
According to the BCRP, 0.9 percentage points in 2026 and 1.1 points in 2027: about 2 points in total over two years.
Will El Niño push Peru into recession?
The BCRP does not forecast one: it expects 3.2% growth in 2026 and 3.0% in 2027. Velarde said the effect will be temporary and that domestic demand is strong.
Which sectors will be hit hardest?
Fishing (−30.7% in 2026), primary manufacturing (−7.1%) and agriculture (−1.5%), according to the September Inflation Report.
How long will coastal El Niño last?
ENFEN expects extraordinary magnitude until February 2027 and a gradual decline through June 2027.
What about inflation?
It was 4.83% nationally in the 12 months to October. The BCRP projects 4.2% at year-end and a return to the target range between March and April 2027.
