Itaú BBA - Macro Scenario – Peru: An earlier-than-expected new president

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Macro Scenario – Peru: An earlier-than-expected new president

November 12, 2020

Heightened political turmoil amid market-unfriendly measures

For the version with all charts and tables, please open the attached pdf file

• 
Official outbreak figures show further containment in the number of new cases and deaths, while authorities expect the economy to fully normalize in the coming months.
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• In an unexpected outcome, Congress voted in favor of ousting President Vizcarra. The head of Congress, Manuel Merino, took over as interim president and will remain in that position until the candidate elected in the presidential elections (April 2021) takes office in July 2021. Meanwhile, market-unfriendly initiatives from Congress will likely continue to advance. Recently, Congress approved an initiative to allow a second withdrawal from private pension savings.


• We revised our GDP forecast to -12.6% (compared to our previous scenario forecast of -11.9%). The large fiscal and monetary stimulus will support the recovery during the rest of the year and 2021 (we expect a GDP expansion of 9.6%), but political uncertainty is a downside risk.

 

João Pedro Bumachar
Julio Ruiz

For the version with all charts and tables, please open the attached pdf file



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