Extract B suggests that 'there is often a trade-off' between inflation and economic growth.

Extract B

In recent years, bilateral trade and investment between Canada and Peru have expanded rapidly, particularly in the critical minerals sector. Peru’s GDP growth accelerated to 5.4% in 2024, propelled by a major copper mining boom and robust domestic consumer spending. However, this brisk expansion has generated significant macroeconomic tensions.

For the Central Reserve Bank of Peru, balancing robust economic growth with price stability remains a formidable task, illustrating the classic trade-off between inflation and economic growth. Headline inflation spiked from 2.1% in late 2023 to over 5.2% by late 2024. This was largely driven by rising global shipping rates and domestic agricultural supply disruptions caused by extreme weather.

To sustain this growth trajectory, Peru requires massive infrastructure development to prevent structural bottlenecks. The Peruvian government plans to channel over $40 billion into upgrading transport networks, deepwater ports, and renewable energy grids over the next decade. Canadian engineering firms and environmental consultancies are actively partnering in these large-scale projects.