Credicorp Bank BCP Analyzes El Niño Economic Impact

Credicorp banking subsidiary BCP noted that Peru could grow 6% following El Niño, characterizing the expansion as more than a simple rebound.

However, Banco Central de Reserva del Perú President Julio Velarde identified El Niño as the primary risk factor for economic performance globally and domestically. Speaking before the congressional budget committee, Velarde highlighted that global wheat prices have already surged 40%.

Velarde warned that economic losses could exceed prior forecasts of a 0.7% drag on gross domestic product in 2026 and 0.9% next year. He noted that the weather event shows signs of reaching extraordinary historical levels comparable to 1867, hitting both activity and inflation.

Agricultural production faces direct risks from weather shocks. Velarde stated that rice, cotton, and lemon crops are the most vulnerable on the northern coast, while highland droughts threaten potato output.