Sensitivity of Peru’s Economic Growth Rate to Regional Climate Variability

The macro-economic growth rate of Peru is analyzed for sensitivity to climatic conditions. Year-on-year fluctuations in the inflation-adjusted gross domestic product (GDP) per capita over the period 1970–2024 are subjected to correlation and composite statistical methods. Upturns relate to cool east Pacific La Niña, downturns with warm El Niño. Composites are analyzed by subtracting upper and lower terciles, representing a difference of ~USD 40 B at current value. These reveal how the regional climate exerts a partial influence among external factors. During the austral summer with southeasterly winds over the east Pacific, sea temperatures undergo a 2.5 °C cooling. Consequently, atmospheric subsidence draws humid air from the Amazon toward the Peruvian highlands, improving crop production. Dry weather along the coast sustains transportation networks and urban infrastructure, ensuring good economic performance over the year. The opposing influence of El Niño is built into the statistics. A multi-variate algorithm is developed to predict changes in the Peru growth rate. Austral summer winds and subsurface temperatures over the tropical east Pacific account for a modest 23% of year-on-year variance. Although external factors and the varied landscape weaken macro-economic links with climate, our predictors significantly improve on traditional indices: SOI and Nino3. Adaptive measures are suggested to take advantage of Southern Oscillation’s influence on Peru’s economy.