Economy in Peru: Income, Poverty, and Food Prices

Peru's economic situation at a glance

The economic situation in Peru is no longer as dramatic as in the years of high inflation and political uncertainty. In 2024 and 2025, the economy recovered, and inflation was significantly closer to the central bank's target range.

At the same time, macroeconomic stability does not automatically mean that daily life becomes easier for everyone. Many households continue to feel pressure regarding food, transport, rent, health, and education.

The old draft largely relied on data from the 2023 crisis phase. This assessment remains important but needs to be updated: Peru is showing recovery, but not complete social relaxation.

Why the situation seems contradictory

Peru can experience economic growth while remaining socially tense. This is precisely the core of the current situation.

On the one hand, BCRP, OECD, and international institutions report growth, lower inflation, and more stable expectations. On the other hand, poverty data, income surveys, and reports on food consumption show that many households continue to be under pressure.

This tension explains why many people do not feel an improvement, even though the major economic figures look better.

Income: When the month is longer than the money

Datum Internacional already reported during the crisis phase that three out of five Peruvians could not adequately cover their basic needs with their incomes. More recent surveys from other providers also show that many employees find their wages insufficient.

The problem is not just about individual prices. The crucial factor is the combination of informal work, weak productivity, unequal opportunities, low wages, and high daily costs.

Those with irregular incomes are less able to absorb price increases. A stable exchange rate or falling inflation only helps to a limited extent if the family still has to recalculate every week.

Food consumption under pressure

The Instituto Peruano de Economía already described a significant reduction in food consumption for millions of people in 2023. The decline in the consumption of proteins such as meat, chicken, eggs, and dairy products was particularly critical.

Later analyses of food security also show that many households had to adjust their diets: less quantity, cheaper products, or abstaining from certain foods.

This is more than a statistic. When families save on food, it affects health, child development, workforce productivity, and quality of life.

Poverty in Peru: slight improvement, but high level

According to INEI, monetary poverty in 2024 was 27.6 percent of the population. In 2025, it decreased to 25.7 percent. This is an improvement, but still a very high figure.

Extreme poverty in 2025 was 4.7 percent. This means that more than 1.6 million people could not even cover their basic food needs with their incomes.

For a country with growth and a stable central bank, this is a serious social challenge. Peru needs not only more growth, but growth that translates into jobs, income, and provision.

Inflation: lower, but not forgotten

The high inflation of previous years has left its mark on many households. Even if annual inflation falls again, many prices remain at a higher level than before.

The BCRP refers to an environment of controlled inflation and anchored expectations for 2025. This is important for stability.

For families, however, purchasing power matters. If incomes do not rise at the same rate as rents, transport, food, and services, daily life remains strained.

This topic is also relevant for travelers. Information on currency in Peru, payment methods in Peru, and travel costs in Peru helps with context.

Informal work as a core problem

A large part of the Peruvian workforce is informal. This means that people work without stable contracts, without full social security, and often with fluctuating incomes.

Informal work makes households more vulnerable. Illness, a poor season, lower demand, or price increases hit harder and faster.

Therefore, it is not enough to just look at unemployment rates. The quality of employment is also crucial: Is the job secure? Is the income sufficient? Are there insurance, pension contributions, and predictability?

Political uncertainty and trust

The economic situation in Peru is not only shaped by prices and wages. Political uncertainty also plays a role.

When governments, Congress, regional administrations, and institutions generate little trust, it becomes more difficult to implement long-term strategies.

Companies invest more cautiously, families save differently, and public programs lose effectiveness if they are not stable and reliable.

What would be effective

Peru needs short-term help for particularly vulnerable households and long-term measures that make incomes more stable.

This includes better jobs, education, vocational training, infrastructure, food security, support for small businesses, and more efficient social programs.

The regional perspective is also important. The situation in Lima differs greatly from rural regions, Andean towns, or the Amazon basin. A solution for all of Peru must take these differences seriously.

What this means for everyday life

For many families, the central question remains simple: Is there enough money until the end of the month?

When food, transport, medicine, school supplies, or rent have to be paid at the same time, pressure arises. Then expenses are postponed, food is substituted, or quantities are reduced.

These decisions seem small, but they are profound. They determine what children eat, whether medical help is sought, how school commutes are organized, and how much security a family feels.

Further topics around Peru

These pages are related to the economy, daily life, travel, and cost of living in Peru.

Sources

INEI – Monetary poverty 2024 and 2025

BCRP – Inflation Report 2025

Instituto Peruano de Economía – Analyses of food consumption and food security

Datum Internacional – Surveys on income and basic needs

OECD – Economic Outlook and Economic Survey Peru 2025

Andina – Reports on wages, inflation, and the economic situation in Peru