Research Briefing | Jul 30, 2021

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

Castillo risks are more in the optics than the agenda - iPad

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.

Back to Resource Hub

Related Services

Seoul, South Korea

Post

BoK’s monetary policy to tighten even as hiking cycle ends

Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.

Find Out More

Post

China: Emerging green shoots in Spring, but not out of the woods

We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).

Find Out More