Peru | Politics, Uncertainty, and the Economy

Peru faces another political crisis following the presidential vacancy, reflecting recurrent instability since 2017. Although the financial impact was limited, uncertainty is weighing on investment, consumption, and growth. Institutional reforms are urgently needed to strengthen governance and economic stability.

Key points

• Key points:
• Peru has once again entered a period of severe political instability following a new presidential change in recent days.
• Despite this context, financial variables have remained stable, and the Peruvian sol even appreciated in the following days.
• However, in the medium term, ongoing political instability heightens uncertainty, negatively affecting investment, consumption, credit conditions (through higher risk premiums), and economic growth.
• Peru needs institutional reforms to build a stable and predictable political system that ensures governability and reduces uncertainty.

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