MNI POLITICAL RISK ANALYSIS – Peru Election Preview

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Peru holds its general election on 12 April in a contest that follows five years of political chaos in the aftermath of the 2021 vote. Voters will determine the next president and vice president, as well as all members of Congress (130 seats in the Chamber of Deputies, 60 in the Senate), following a return to a bicameral legislature. In this preview, we provide a background to the election race, an explainer of the electoral system and identities of the main presidential candidates, a chartpack of the latest opinion polling and predictions market odds, analysis of various post-election scenarios with assigned probabilities, a financial market and EM credit overview, and views from sell-side analysts. 

Since 2016, Peru has had a run of nine separate presidents that has resulted in a deeply divided and chaotic political environment and record-low public trust in both politicians and political institutions. The Odebrecht corruption scandal that erupted during the presidency of Pedro Pablo Kuczynski in 2018 and claimed the careers of several of his short-term successors severely dented public trust in establishment politics. 

This was then followed by the election of far-left outsider Pedro Castillo in 2021 amid calls for a new constitution and the fallout of the COVID-19 pandemic that hit Peru particularly hard. Castillo’s eventual impeachment by the Congress presaged the terms of historically unpopular presidents Dina Boluarte and José Jerí, the latter of which was censured by Congress earlier this year and replaced by the incumbent, José María Balcázar. 

The current election comes at a time of significantly heightened public concerns about security issues related to criminal gangs exploiting a weak and corrupt police force, resulting in extortion demands, kidnappings, and murders. The impact of the wave of immigration in recent years as a result of a major exodus from Venezuela, has also strained the Peruvian social infrastructure, with most candidates advocating a hardline stance on border control. These highly emotive topics, compounded by political fragmentation and a breakdown in historical party structures has resulted in an historically open race to succeed Balcázar on inauguration day on 28 July.