Castillo reshuffles his Cabinet

PERU - In Brief 07 Aug 2022 by Alfredo Thorne

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On Friday, President Castillo reshuffled his Cabinet for the fifth time in a year of government. Although his Prime Minister (PM), Mr. Anibal Torres, had resigned, President Castillo said on Friday that had confirmed him once again. In addition, he made 6 more changes, and the most relevant was the new Minister of Economy and Finance, Mr. Kurt Burneo, replacing Mr. Oscar Graham. While President Castillo said that this was a consensus Cabinet and encouraged Congress to collaborate, the message is that some have turned down the offer to join the Cabinet and he is losing valuable professionals, for example, the former Foreign Minister, Mr.César Landa. Mr. Burneo was Finance Undersecretary during the Toledo Government (2001-06) and was Chairman of Banco de la Nación, the largest state-owned bank. He had helped Castillo draft the economic program during the 2021 presidential campaign. He is left-wing Keynesian who believes in counter-cyclical policies. In his first press interview, he said that the economy is losing momentum and anticipates real GDP will grow only 2.2% (less than the 3.6% forecast by Mr. Graham). To impulse the economy he plans to stimulate government investment, focus more on cash transfers, and harmonize fiscal and monetary policies. (He hinted that the central bank is hiking too much.) However, the political crisis has intensified as we commented in our previous brief, and President Castillo is under strong pressure to resign.