Peru | Castillo risks are more in the optics than the agenda

President-elect Pedro Castillo will struggle to pass legislation in Peru’s fragmented Congress, meaning the proposals that markets most worry about are unlikely to become reality.

What you will learn:

• But if he fails to regain investor confidence, the economic damage could be severe.
• Should private sector confidence remain low next year, taking the sol to 4.50/$1 in 2022, per capita income would take another year to recover its prepandemic level.
• Meanwhile, external debt would shoot up to a 20-year high, squeezing the balance sheets of households, firms, and the government.