Deutsche Bank Predicts Peru's Central Bank to Cut Rates by 50bps by End 2025

Deutsche Bank still expects Peru's central bank to cut rates by 50 basis points by the end of 2025, despite last week's rate hold. The bank's forecast is based on its expectation of moderate inflation and strong economic growth in Peru.

Peru's economy is projected to have expanded by nearly 3% in the second quarter of 2025, according to the central bank chief economist Adrian Armas. This growth rate aligns with the central bank's forecast of 3.1% economic expansion by the end of the year [1][2].

The Peruvian gross domestic product (GDP) likely grew between 2.4% and 2.6% in May and more than 4% in June. However, July's economic figures were negatively impacted by protests from informal miners who blocked a key copper corridor, reducing growth by approximately 0.2% [1][2][3].

The central bank expects GDP growth to ease to 2.9% in 2026. Despite the recent protests, Peru remains the world's third-largest copper producer and a major exporter of metals and agricultural commodities into the United States.

The U.S. President Donald Trump's announcement of a 50% tariff on copper imports, set to take effect on August 1, could lead to higher prices in the U.S. if the country lacks the capacity to substitute its copper imports. Chile and Mexico, other major copper exporters, are looking to ship their production to new markets [1][3].

Despite the positive economic outlook, Deutsche Bank still expects Peru's central bank to cut rates by 50 basis points by the end of 2025. The bank's forecast is based on its expectation of moderate inflation and strong economic growth in Peru [3].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3T80Q4:0-peru-central-bank-sees-economy-growing-nearly-3-in-q2/
[2] https://uk.investing.com/news/economy-news/perus-economy-projected-to-grow-nearly-3-in-q2-2025-93CH-4166307
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3T80Q4:0-peru-central-bank-holds-growth-forecasts-steady-as-trump-readies-copper-tariffs/