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Political outlook

02/06/2022

Recent appointments strengthen the balance of power, but some risks persist

Last month, new appointments were made in constitutionally and regulatory autonomous entities and in the Executive, favoring the balance of power. On the one hand, the election of the Constitutional Court judges and the appointment of the presidents of regulatory bodies show signs of stability, on the other hand, the appointments to the Cabinet send out ambiguous signals.

While the Minister of Transport and Communications and the Minister of Agriculture are being questioned, the appointment of the Minister of Energy and Mines constitutes an improvement of technical capacities and a reduction of the influence of cerronismo in the sector. Among her first actions, Minister Herrera replaced senior officials, strengthening the institutionality of the sector.

Despite the changes made to the Cabinet by the president, Congress decided to vote for a censure motion against the Minister of Labor, Betssy Chávez, and with 71 votes in favor, 28 against and 12 abstentions, the vote demonstrated the fractioning of the ruling party. In addition, it is expected that the new minister will maintain the continuity in the sector, in line with the words of Prime Minister Torres: “The Government will continue with the direction previously outlined.”

New points of view could alter the political outlook. These include the decision of the Attorney General, Pablo Sánchez, to investigate President Castillo for the case of Puente Tarata III. The information revealed in this investigation could put pressure on Congress to push for presidential impeachment or to bring forward the election. In addition, the approval of a constitutional infringement against Dina Boluarte could open new scenarios in the present phase of the process of transition.

To access the complete report contact us at: contactaSAE@apoyoconsultoria.com

Camila Bozzo

Head of Political Analysis

OUR PERSPECTIVE

Changes in the Cabinet have strengthened the alliance with Congress amid a context of growing institutional weakness.

The Government’s main allies, Fuerza Popular and APP, leveraged the crisis triggered by the murder of 13 mine workers in Pataz to strengthen their influence over ministerial appointments.

Economic growth likely remained steady at the beginning of Q2 and is becoming increasingly broad-based, despite the uncertain external environment.

So far this year, the economic recovery appears to have consolidated, with growth becoming more broad-based. Domestic demand has shown solid performance.

The serious deterioration in the conduct of economic policy in the United States would impact Peru's economic growth mainly in 2026.

In the first quarter of the year, economic growth remained solid (3.6%). This was the result of a combination of favorable dynamics for GDP.

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