Central Bank of Peru conference calls for macroeconomic stability and continued disinflation amid trade tensions and global uncertainty

The Central Bank of Peru published conclusions from the conference “Reordering Global Trade and Finance in a Shock-Prone World”, co-organised with the Reinventing Bretton Woods Committee and the Inter-American Development Bank, warning that heightened global uncertainty and trade tensions reinforce the need to preserve macroeconomic stability and advance reforms across the region. The update notes that trade tensions are associated with weaker growth prospects and shifts in trade patterns and global supply chains, while higher US inflation expectations and recent fiscal measures add to uncertainty via a more cautious Federal Reserve stance and questions about the future US dollar exchange rate. Despite sizable shocks, spillovers to the region have been relatively moderate in most economies except Mexico, with tariffs on regional exports lower than those applied to emerging Asia; commodity prices remain elevated and capital flows have not reversed, although foreign direct investment is still limited. Policy priorities highlighted include aligning monetary and fiscal policy, avoiding excessively expansionary fiscal stances that could generate demand-driven inflation, progressing fiscal consolidation where public debt remains well above pre-pandemic levels, and maintaining central bank efforts to reduce inflation or keep it near target given the risk of easing too early; the agenda also points to reforms in infrastructure, digitalisation, labour market modernisation and social protection to address demographic change.