In its October World Economic Outlook, the International Monetary Fund (IMF) raised Peru’s 2026 economic growth forecast from 2.8% projected in April to 3%, while nudging up its 2027 forecast from 2.8% to 2.9%. The upgrade makes Peru the third-fastest-growing economy in South America, behind only Venezuela (5%) and Paraguay (4.5%). Against the backdrop of a broad global slowdown, Peru bucked the trend with an upward revision, reflecting the resilience of its economic fundamentals.

According to IMF data, Peru’s 2026 growth rate will significantly outpace several major regional economies, including Ecuador (2.7%), Brazil (2.2%), Colombia (2.2%), Argentina (2.1%), Uruguay (1.3%) and Chile (0.6%), while Bolivia is expected to contract by 3%. Peru’s forecast is also well above South America’s average growth rate of 2.1% for 2026. The IMF also expects global growth to pick up from 3.1% in 2026 to 3.4% in 2027, while global inflation is expected to ease from 4.7% to 4.1%.

Peru’s strong economic performance is supported by solid data. Speaking at the 21st Chile-Peru Business Council meeting on October 13, Peruvian Economy and Finance Minister Cuba noted that in the first half of 2026 private investment grew 15.5% in real terms, goods exports reached US$83 billion from January to September, and at the current pace full-year exports are expected to reach US$100 billion. The Ministry of Economy and Finance expects Peru’s economy to grow 3.4% in both 2026 and 2027.

Strong export performance is the core engine of growth. Peru’s exports have grown for 28 consecutive months, with total exports from January to August exceeding US$74 billion, up 34% year on year. Mining exports reached US$53.899 billion, up 50.6%; copper exports totaled US$25.6 billion (+47.5%); and gold exports reached US$18.8 billion (+54.8%). China remains the largest export destination, with exports to China reaching US$28.261 billion in the first eight months, up 39%. Non-traditional exports also performed strongly: blueberry exports rose 46.5%, pomegranates 28.7%, and quinoa 21.3%. The number of exporting companies rose to 8,741, of which 67% are MSMEs.

The continued expansion of private investment provides internal momentum for growth. Private investment has grown for nine consecutive quarters, rising 13.2% in the first quarter. Chile, with cumulative direct investment of US$4.548 billion, is Peru’s third-largest source of foreign investment, accounting for 13.3% of Peru’s total inbound foreign investment, concentrated in mining, manufacturing and energy. Minister Cuba said Peru has maintained fiscal prudence amid political volatility in recent years, and business expectations for investment and hiring remain high.

However, Peru’s economy also faces multiple risks. The IMF warned that renewed escalation of geopolitical conflicts, adjustments to AI expectations, intensifying trade tensions and fiscal vulnerabilities could all weigh on global growth. The El Niño phenomenon also poses a potential threat to Peru’s economy. Cuba noted that the informal economy affects about 90% of microenterprises outside Lima, and tax reform and formalization efforts remain medium- and long-term challenges. While the growth outlook is positive, how to translate macroeconomic stability into broader investment and employment opportunities remains a key challenge for Peru.

An El Niño event that could rank among the strongest in 150 years is delivering a one-two punch to copper mining regions in South America and Africa—which together account for roughly half of global copper production—through both excessive rainfall and severe drought. The U.S. Climate Prediction Center (CPC) estimates a 97% probability that this El Niño will persist until early spring 2027, with an 81% chance of reaching extremely strong levels between October and December 2026.

Two Major Production Regions, Two Distinct Plights

By altering global precipitation patterns, El Niño presents copper miners in different regions with starkly different yet equally severe challenges.

• South America – “Flooded”: In Chile and Peru, the primary threat comes from torrential rain and flooding. Heavy downpours directly disrupt mining operations, trigger mudslides that cut off transport arteries, and rough seas force the temporary closure of key export ports.

• Africa – “Parched”: In the copper belts of Zambia and the Democratic Republic of Congo (DRC), the main challenge is hydroelectric power shortages caused by drought. Mines in this region rely heavily on hydropower, and the drought directly leads to insufficient electricity supply, threatening mine operations.

Impact by Production Region

Chile: Rainstorms Disrupt Logistics, Output Forecasts Revised Downward

As the world’s largest copper producer, Chile has recently been hit by unusually heavy winter rains, with some areas receiving more rainfall in a single day than their typical annual total. The disaster has caused at least 10 deaths and may result in hundreds of millions of dollars in losses.

• Mine operations disrupted: Multiple miners, including state-owned Codelco, Anglo American, and Antofagasta, have been forced to activate emergency response measures.

• Logistics and exports interrupted: Several sections of the Pan-American Highway—a critical transport “lifeline”—have been closed due to flooding and mudslides. The major copper export ports of Huasco and Coquimbo have also been temporarily closed due to rough sea conditions.

• Output forecasts revised downward: The Chilean Copper Commission (Cochilco) had already lowered its 2026 copper production forecast for Chile to 5.3 million tons in May.

Peru: State of Emergency Declared, Logistics Risks on the Rise

On July 2, the Peruvian government declared a 60-day state of emergency across 796 districts and municipalities due to heavy rainfall and significant disaster risks brought by El Niño. To date, major copper mining operations have not been significantly affected, but logistics links—including ore transport, supply deliveries, and shipping schedules—are already facing disruption risks.

African Copper Belt: A “Survival Test” of Hydropower Dependence

In Zambia and the DRC, the power crisis triggered by drought is the core issue. Key examples include:

• Zijin Mining: Its flagship Kamoa-Kakula copper mine in the DRC sources approximately half of its electricity from the DRC’s national grid, which is predominantly hydroelectric. Affected by previous seismic events and power supply issues, the company has revised its 2026 production guidance downward from approximately 600,000 tons to around 300,000 tons.

• CMOC Group: Its two major mines in the DRC—TFM and KFM—also rely primarily on hydroelectric power. However, the company has stated that it has established comprehensive contingency plans using waste heat recovery and diesel power generation reserves.

• Nationwide crisis in Zambia: As an important African copper producer, Zambia is experiencing severe nationwide power outages due to the drought triggered by El Niño.

Market Response: Tighter Supply, Amplified Price Sensitivity

Against a backdrop where the copper market has shifted from surplus to deficit, the marginal impact of climate disruptions has been significantly amplified.

• Plunge in processing fees: For the week ending July 17, the spot processing charge (TC) for imported copper concentrates widened further into negative territory, reaching -$146.15 per ton, reflecting extreme tightness in concentrate supply.

• Structural deficit: Analysts project that the global copper market could face annual shortfalls of 300,000 to 400,000 tons in both 2026 and 2027. Huatai Securities predicts that copper prices could exceed $12,000 per ton in 2026.

Miner Responses: Diesel as a Short-Term Backstop, Green Power for the Long Term

Facing climate shocks, miners are adopting strategies across two time horizons:

• Short-term contingency (diesel power generation): This is the most common backup solution. Despite its high cost, it can quickly address power interruptions. For example, JCHX Mining has pre-stocked diesel for its project in the DRC.

• Long-term planning (green power and self-built power stations): Constructing new core hydropower stations is the fundamental solution, but these are generally not expected to come online until 2028–2029. CMOC Group has planned photovoltaic projects, while Tengyuan Cobalt has planned a 100 MW hydropower station.

SANTIAGO — South Korean President Lee Jae‑myung and Chilean President José Antonio Kast announced on July 30, following a summit at La Moneda Palace in Santiago, that the two countries have agreed to restart the long‑stalled joint committee mechanism of their bilateral Free Trade Agreement, aiming to modernise the 22‑year‑old trade pact. This is the first visit by a South Korean president to Chile in 11 years.

The Korea‑Chile FTA, which took effect on April 1, 2004, was South Korea’s first ever free trade agreement. The two sides have been holding upgrade negotiations since 2018, with nine rounds of working‑level talks held up to April 2024. However, the joint committee – the highest ministerial decision‑making body under the agreement – has not met since 2015. The decision to restart the committee signals a new phase in the upgrade process.

At a joint press conference, President Lee said: “In 2004, South Korea chose Chile as its first FTA partner. Bilateral trade has quadrupled over the past two decades, proving that our strategic choice was correct.” He stressed that the agreement’s update “must reflect new realities” – not only revising trade rules but also expanding business opportunities. The upgrade talks will cover new issues such as digital trade, artificial intelligence, clean technologies and critical minerals supply chains.

President Kast said the two sides agreed to “restart the Korea‑Chile FTA committee – which last met in 2015 – and jointly explore a roadmap for modernising and strengthening the bilateral relationship.” He described the Korea‑Chile FTA as one of the earliest FTAs between Asia and South America, calling it a “great honour” for Chile.

Beyond trade, the two countries signed five memoranda of understanding covering critical minerals, public security, polar research, maritime safety, and investment. The most central was the Memorandum of Understanding on Mineral Resources Partnership, which upgrades the existing bilateral minerals committee to the ministerial level and establishes a new working‑level dialogue channel headed by director‑general level officials. Cooperation will cover the entire value chain of strategic minerals such as lithium and copper, from resource development to downstream applications.

President Lee noted: “Chile is the world’s largest copper producer and holds the world’s largest lithium reserves; South Korea is a global leader in semiconductors, batteries and other cutting‑edge industries. The two countries are natural and ideal partners in building a critical minerals supply chain.” President Kast responded with a Korean proverb: “‘Even a piece of paper feels lighter when two people carry it together’ – that is how we see our critical minerals cooperation today: Chile and South Korea jointly addressing challenges to provide supply chain stability for the world.”

The two leaders also reached consensus on infrastructure, defence and shipbuilding cooperation. South Korea pledged support for Hyundai Engineering & Construction’s project on the Chacao Channel Bridge – South America’s first four‑lane suspension bridge. The two sides also agreed to expand coordination between police and coastguard agencies on transnational crime and maritime security. President Lee requested Chile’s support for South Korea’s efforts to resolve the North Korean nuclear issue and achieve peace on the Korean Peninsula, with President Kast pledging to “work together for peace and security on the Korean Peninsula.”

The summit was President Lee’s second stop on his Latin America tour, following Brazil. (End)

Sources: Yonhap News Agency, The Korea Herald, The Korea Times, Pulse (South Korea)

MONTEVIDEO — International Monetary Fund Managing Director Kristalina Georgieva visited Uruguay on July 30, the first visit by the IMF’s top leader to the country in 15 years. During the two‑day visit, Georgieva lavished praise on Uruguay’s macroeconomic stability and institutional strengths, but also cautioned the South American nation that stability alone is not the end goal – faster growth must be pursued.

Speaking at a public dialogue in Montevideo alongside Uruguay’s Central Bank President Guillermo Tolosa, Georgieva highly commended the country’s achievements in macroeconomic stability, inflation control and institutional resilience. “Uruguay is a beautiful country. I didn’t come before because you were doing so well, while too many countries were not doing enough,” she said. “That stability is built on social consensus – and in a world increasingly marked by confrontation and polarisation, that is an extremely valuable asset.”

Uruguay repaid all its debts to the IMF in 2006 and has not sought any financing from the Fund for many years since. The country’s public debt stands at about 60% of GDP, and 98% of its electricity matrix comes from renewable sources. Georgieva specifically noted that Uruguay’s success in bringing inflation down to 4.5% and anchoring market expectations was “truly impressive.”

However, the IMF chief made it clear that stability should not become an excuse for complacency. “Stability is the country’s best advertisement, but you can’t put stability in the fridge – we do need growth,” she urged. She called on Uruguayan authorities to “preserve the country’s stability, but take more risks in a new world,” encouraging greater investment and expanded credit to drive economic growth.

Georgieva advised Uruguay’s central bank to maintain the 4.5% inflation target for the time being, with any downward adjustment delayed for at least two years. She also urged Uruguay to deepen the de‑dollarisation of its economy – currently about 70% of bank deposits are still held in foreign currency – and to reinforce the central bank’s independence. Drawing on her own country’s experience in Bulgaria, Georgieva said that this dependence on the dollar stems from the fear of past crises, and suggested incentivising local‑currency savings to change the situation.

On the regional front, Georgieva believes Uruguay is well placed to consolidate its role as a regional logistics hub. She called on Uruguay to strengthen cooperation with its neighbours, noting that the region “has a great deal of untapped potential.” She also mentioned that artificial intelligence, if used properly, could become a major lever for productivity gains.

Uruguay’s President Yamandú Orsi received Georgieva at the Executive Tower. Economy and Finance Minister Gabriel Oddone said the visit was an “invitation” for Uruguay – “to look forward, take more risks, and be bolder in both public policy management and the private sector.” Oddone also revealed that the IMF would use Uruguay’s experience in tax administration cooperation as a model to promote to other countries.

Georgieva had previously visited Argentina, and when speaking about the region she said she “truly hopes Latin America shifts into a higher gear.” (End)

Sources: EFE, Spanish‑language Xinhua, El País (Uruguay), El Observador (Uruguay), Infobae, La Nación (Paraguay)

DailyEconomic – The Office of the U.S. Trade Representative issued a notice on July 23 local time, announcing additional tariffs ranging from 10% to 12.5% on 60 economies under Section 301 of the Trade Act of 1974, citing the so-called “combating forced labor.” The new tariffs took effect at 12:01 a.m. Eastern Time on July 24. This marks the largest move by the Trump administration to rebuild tariff barriers since the Supreme Court struck down its broad-based tariff policy.

Tariffs in Two Tiers, Latin American Countries Grouped Accordingly

According to information released by the U.S. Trade Representative’s Office, the new tariffs are divided into two tiers: 10% and 12.5%. In the Latin American region, the 18 affected countries and territories are divided into two groups for tariff application.

Latin American countries subject to the 10% additional tariff include: Mexico, Guatemala, Honduras, El Salvador, Argentina, Ecuador, and Trinidad and Tobago. Notably, the Mexican government has stated that under the U.S.-Mexico-Canada Agreement (T-MEC), 85% of its exports are eligible for exemptions, meaning the new tariffs will actually apply only to the remaining 15% of its exports.

Latin American countries subject to the 12.5% additional tariff include: Costa Rica, Panama, the Dominican Republic, Colombia, Venezuela, Uruguay, Chile, Brazil, Peru, Nicaragua, and Guyana.

In addition, the United States is imposing a uniform 10% tariff on the 27 economies of the European Union.

Citing “Forced Labor” and Invoking Section 301

The tariff measure stems from an investigation launched by the U.S. Trade Representative’s Office in March of this year. The U.S. side claims that the policies and measures of the relevant countries regarding bans on imports of products made with “forced labor” have “harmed the interests of American workers and businesses.” Following the investigation and consultations with the countries concerned, the U.S. determined that these countries’ practices constituted “unfair trade practices.”

The new tariffs are intended to replace the 10% provisional global tariffs previously imposed by Trump. In February of this year, after the U.S. Supreme Court ruled that the Trump administration’s broad-based global tariff policy was unlawful, the Trump administration imposed provisional tariffs under Section 301 as a transitional measure.

Latin American Economies Under Pressure, Calls for Trade Diversification Renewed

Analysts point out that this tariff measure will impact exports from multiple Latin American countries. Major Latin American economies such as Brazil and Mexico are highly dependent on exports to the U.S., and the new tariffs may further compress their export competitiveness. Previous reports have shown that due to factors including changes in U.S. tariff policies, foreign direct investment inflows to Latin America and the Caribbean grew by only 1.7% year-on-year in 2025, while newly announced investment in tariff-sensitive sectors such as the automotive industry fell by 61% year-on-year.

Since the beginning of this year, several Latin American countries have expressed dissatisfaction with U.S. tariff policies. Brazil’s foreign minister had previously criticized the U.S. tariff hikes as having “no justifiable grounds.” Latin American economies are also accelerating the implementation of trade diversification strategies to reduce their over-reliance on the U.S. market.

China is not on the current tariff list, as its exports to the U.S. are already subject to higher specific tariffs.

On July 24, 2026, Ecuador and Canada formally signed a Free Trade Agreement (FTA) in Canada, marking the conclusion of more than two years of negotiations between the two countries. Ecuador’s Vice Minister of Export and Investment Promotion, Roger Crespo, had announced the news on July 21, describing the signing as “an important milestone in bilateral relations.”

Negotiations for the agreement began in April 2024 and, after six rounds of intensive consultations, were declared technically concluded on February 4, 2025. On May 24, 2025, during the inauguration ceremony of Ecuadorian President Daniel Noboa, the two countries signed a joint statement to accelerate the formal signing of the agreement. With this signing, Canada becomes Ecuador’s latest free trade partner, following existing agreements with the European Union, the United Kingdom, China, and the European Free Trade Association.

According to the agreement, once fully implemented, Ecuador will eliminate tariffs on 97.2% of tariff lines, while Canada will eliminate tariffs on 98.1% of tariff lines. Ecuador’s Ministry of Production, Foreign Trade, Investment and Fisheries further stated that 99.6% of Ecuadorian exports will enjoy zero-tariff access to the Canadian market.

Regarding Ecuador’s exports to Canada, a wide range of products will benefit from immediate tariff elimination: textiles and clothing from 18% to zero, canned vegetables from 17% to zero, mineral water from 11% to zero, sardines from 11% to zero, roses from 10.5% to zero, confectionery from 10% to zero, furniture from 9.5% to zero, flowers and buds from 8% to zero, ceramics from 7.5% to zero, and chocolate from 6% to zero. Key agricultural products such as shrimp, cocoa, bananas, and tuna are also included in the list of beneficiaries. At the same time, Canadian exports to Ecuador will also enjoy tariff reductions, including wheat, pharmaceuticals, mobile phones, laptops, cleaning supplies, fertilizers, industrial heavy vehicles, and drones.

The agreement also covers a wide range of areas, including trade in services, investment, digital trade, telecommunications, government procurement, financial services, trade facilitation, state-owned enterprises, and dispute settlement mechanisms. In addition, the agreement specifically includes chapters on labor rights, environmental protection, gender equality, indigenous participation, and the development of small and medium-sized enterprises. Regarding sensitive products, Ecuador successfully excluded agricultural products such as rice, corn, sugar, dairy products, as well as beef, pork, and poultry from the liberalization scope.

In terms of economic impact, the agreement will open up the Canadian market, which has nearly 40 million consumers with high purchasing power. In 2025, Ecuador’s exports to Canada amounted to approximately US$563 million, while imports stood at about US$478 million, achieving a trade surplus of roughly US$85 million. Total bilateral trade in goods exceeded 2.1 billion Canadian dollars, and Canada’s direct investment in Ecuador reached approximately 5 billion Canadian dollars, mainly concentrated in the mining and natural resources sectors. Experts expect that the agreement will promote employment growth in Ecuador, attract more investment, and expand the supply of products in the market.

Following the signing, the agreement will need to undergo the respective legal approval procedures of both countries before it can officially enter into force, with implementation expected by the end of 2026 or early 2027.