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Political Outlook


New crisis triggers the third Cabinet after a second reshuffle in six months of government

In the first month of the year, successive crises have continued to drastically deteriorate the image and credibility of the Executive. The resignation of Prime Minister Mirtha Vásquez deepened the crisis within a Government that was already facing a series of challenges. Meanwhile, tensions continue to rise between the Executive and Legislative branches, in a Congress with a high level of fragmentation and weak alliances that respond to particular interests. However, the current correlation of forces in Congress would still seem to indicate that there is no coalition capable of obtaining the necessary votes to impeach President Castillo.

Going forward, the hasty resignation of the Prime Minister, Mirtha Vásquez, and the appointment of a new Cabinet headed by Congressman Héctor Valer (Perú Democrático), will seek to reconfigure the political alliances of the Government. Finally, on the whole, no substantial improvement is seen in the selection of new ministers, and due to the way in which they were appointed, it is likely that the contradictions and tensions within this Cabinet will quickly become evident.

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Revelations that show the presidential circle is involved in corruption cases further deteriorate the image of the Government

The political environment in February was marked by the revelation of alleged cases of corruption in the presidential circle and by the swearing in of two Cabinets in less than two weeks.

Positive signs at the start of the year, but low economic growth is still expected

In the first few months of the year, the limited impact from the third wave of COVID-19 infections has enabled the sectors that had been lagging behind to experience a rebound. As a matter of fact, we estimate that an important part of the growth of the first few months of the year will be explained by this “rebound” in the sales in retail and some services.

La confianza sigue deprimida, pero los jóvenes comienzan a percibir mejoras en el mercado laboral

A casi dos años desde el inicio de la pandemia, la confianza de los consumidores en Lima Metropolitana continúa entrampada en niveles mínimos históricos.

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