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COUNTRY INSIGHTS

Internal security to the fore; Congress approves pension reform; BCRP to pause in November
PERU · Report · 22 Oct 2024

We cover three topics in this report. First, we discuss the recent security issues challenging Congress, and President Dina Boluarte. Then we summarize and analyze the new pension fund reform published on September 24th. Finally, we discuss the decision by the Board of the Banco Central de Reserv...

Political crisis rumbles on; growth slows, CA shifts to surplus and fiscal deficit increases; we retain our yearend forecast of PEN3.9:USD1
PERU · Report · 17 Sep 2024 · 1 response

In this report, we discuss our new quarterly forecasts, which are guided by our three scenarios: base, low and high cases. On politics, we remain firm on our base case, wherein President Dina Boluarte stays in power until the end of her term in July 2026. Moreover, we have reduced the probability...

Boluarte’s bid for popularity fails; economy slows, but should grow 2.8% in 2024; BCRP likely to cut 25bp per month until December
PERU · Report · 20 Aug 2024 · 1 response

We discuss three topics in this report. We begin with President Dina Boluarte‘s recent failed attempt to boost her popularity. We next consider the June real GDP report from the Instituto Nacional de Estadística e Informática (INEI, the national statistical institute), which confirms a sharp econ...

Electioneering for 2026 starts early; economy expands into Q2 2024, and government plans for a larger fiscal deficit; we expect the BCRP to resume cuts in October
PERU · Report · 16 Jul 2024 · 1 response

In this report, we discuss three topics. We observe that the campaign program for the 2026 elections has been brought forward. We then explain that the economic rebound that started in April 2024 was sustained into Q2. Finally, we discuss the drivers of the decision by the Board of the Banco Cent...

BCRP to extend its policy pause on July 11th
PERU · In Brief · 08 Jul 2024

We have decided to call for an extended policy pause at Banco Central de Reserva del Perú's (BCRP, the central bank) Board meeting on July 11th. Although in our June report we had called for a 25bp cut, the Instituto de Estadística e Informática's (INEI, the statistical institute) June inflation ...

Congress prepares for 2026 elections; we expect the fiscal deficit to widen, and the CA to remain in surplus; Central Bank will keep cutting, but more policy pauses can’t be ruled out
PERU · Report · 18 Jun 2024

In this report, we begin by discussing politics, focusing on the high number of laws approved by Congress that will shape the 2026 presidential and congressional elections. We then summarize our forecasts on the economy. We start by discussing our base, low and high-case scenarios, followed by re...

President Boluarte under fire; real GDP to accelerate in Q2; BCRP’s easing cycle nears its end
PERU · Report · 21 May 2024

We cover three topics in this report. First, we discuss the likelihood of Congress impeaching President Dina Boluarte. Then, we evaluate Peru’s economic performance, suggesting that real GDP remained stagnant throughout Q1 2024. We expect a rebound in Q2 2024, on the back of fiscal stimulus, and ...

Boluarte government weakened further; economic recovery takes off in Q1 2024; BCRP’s 25bp cut surprises markets
PERU · Report · 16 Apr 2024

In this report we discuss recent political developments, with a focus on President Dina Boluarte; using high-frequency economic reports, we present our updated forecast, and argue that the economy rebounded in Q1 2024; and discuss the BCRP Board’s decision to cut rates by 25bp, surprising both ma...

Peru: pension funds withdrawal to be approved on Thursday
PERU · In Brief · 09 Apr 2024 · 1 response

As expected, today Congress scheduled the vote on the pension funds withdrawal bill at its Thursday congressional plenary. The bill calls for pension funds’ contributors to be able to withdraw up to four Unidades Impositivas Tributarias (UITs, or tax-inflation-indexed units). This would allow eac...

Peru: Prime Minister in Congress
PERU · In Brief · 03 Apr 2024

Prime Minister Gustavo Adrianzén and his Cabinet were in Congress this morning requesting the rejection to the no confidence vote. In his speech said that his priorities were the economic recovery and internal security. Although President Boluarte is under scrutiny on an apparent failure to decla...

Peru: Congress to approve a new pension fund withdrawal
PERU · In Brief · 26 Mar 2024 · 1 response

Last night, Congress' Economy Commission approved by 17 votes (only 3 against) a bill approving the seventh private pension fund withdrawal. Initially the draft conditioned the 4 Unidades Impositivas Tributarias (UITs, the inflation index units, amounting each to PEN5,150 or US$1392) withdrawals ...

Opposition prepares for 2026 election; recovery gains speed in Q1; BCRP to pause through May-June
PERU · Forecast · 12 Mar 2024

In this report, we summarize our latest forecasts. First, we discuss possible political scenarios. We analyze the recent Cabinet reshuffle, the resignation of Prime Minister Alberto Otárola and the appointment of his replacement Gustavo Adrianzén (our view is that this has changed little). Next, ...

Pension fund withdrawal likely
PERU · In Brief · 11 Mar 2024 · 1 response

Congress' Economic, Banking, Finance and Financial Intelligence Commission has drafted a new law authorizing a new withdrawal from workers' pension funds. It proposes that those workers that had not been contributors until December 31st, 2023, can withdraw up to 4 Unidades Impositivas Tributarias...

Peru: Pension fund withdrawal
PERU · In Brief · 07 Mar 2024

The risk of a new pension fund withdrawal has increased recently, although we believe that the probability remains at 40%. Congress-member Jose Luna Galvez, owner of the Telesup University and Podemos political party, which has strong influence on Congress's Consumer Defense Commission, is pressi...

Gustavo Adriansén appointed new Prime minister
PERU · In Brief · 06 Mar 2024 · 1 response

Last night, Prime Minister Alberto Otárola resigned. He had been under pressure and turned into a drag on President Dina Boluarte. An edited audio released on a prime TV program Panorama on Sunday night had prompted his resignation. In this audio he is listened offering a job in the government to...

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