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.
Firms must brace for higher ‘new normal’ construction material prices
New research by Oxford Economics suggests that construction materials prices have shifted permanently higher due to the shocks of the past couple of years. Project managers and investors should anticipate costs being at least 15-20% higher in 2024 and onwards than in 2021.Find Out More
New Activity Trackers suggest momentum is waning
After a choppy first quarter of GDP data, our novel Activity Trackers (which incorporate proprietary daily sentiment data from Penta) suggest that economic momentum in EM Asia is on a softer trend in Q2 (at least outside of China) supporting our view of easing underlying inflationary pressures and diminishing appetite for further rate hikes.Find Out More