Peru elects Keiko Fujimori as its next president
This report is devoted to analyzing the outcome of the second-round runoff presidential election, in which candidates Keiko Fujimori (KF) of Fuerza Popular (FP) and Roberto Sánchez (RS) of Juntos por el Perú (JPP) faced off on June 7. First, we discuss the uncertainty surrounding the election results, from the exit polls on Election Day, to the official results published by the Oficina Nacional de Procesos Electorales (ONPE, the office for electoral process). Then, we explain our expectation that, based on the remaining uncounted ballots, and those that have been contested, that KF has won the presidency.
The rest of the report focuses on the risks, and our own forecasts. We argue that a side effect of a “dead-heat” election result is a deeply divided country. Such an outcome demands that a Fujimori government address the roots of this division, and take immediate measures to unite the country. While initial steps, such as the composition of the Cabinet, may be primarily gestures, there must also be more substantial measures, such as greater equality in the distribution of wealth. We go on to argue that the return to a bicameral Parliament, and the fact there are now only six parties in Congress and the Senate, may be a positive outcome. We expect no further presidential impeachments, or radical changes to the Constitution, during Fujimori’s term.
Finally, and with reference to FP’s economic and political program published prior to the elections, we outline the main economic policies that we expect the KF administration to pursue. We argue that this could lead to an acceleration in economic growth, and lower inflation. However, the Banco Central de Reserva del Perú’s Board may have limited scope to engage in a policy rate-cutting cycle, and we predict only one 25 basis point cut before year-end.
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