Impeachment risk for President Boluarte rises; we expect slowdown to 2.3% in H2; global risks led Central Bank to extend its policy rate pause
In this report, we discuss the risk of President Dina Boluarte facing impeachment in the final year of her presidential term; we then discuss recent economic performance, and argue that the economy will decelerate to 2.3% in H2; and finally we discuss the drivers that led the Board of the Banco Central de Reserva del Perú to extend its policy pause.
On March 26th, ahead of the April 12th deadline, Boluarte, following the constitutional mandate, published the law calling for the general elections to take place on April 12th, 2026. Local political analysts have speculated about why the president brought this formality forward, with most concluding that she is keen to quickly direct public attention toward the elections—and away from herself. Unfortunately, assuming this was the case, her decision has backfired, with public attention once again focused on the performance of her Cabinet; her government’s handling of internal security; and the investigations into her personal conduct.
In our previous report, we argued that the risk of Boluarte being impeached in the final year of her term, which starts on July 28th, had increased. At that time, we assigned a 45% probability of impeachment. Some political groups in Congress regard impeachment as a viable strategy with which to distance themselves from the government. The Constitution stipulates that, should the president resign in the final year of her term, the speaker of Congress should take over as acting president to oversee the elections, with Congress remaining seated until the end of its term (July 28th, 2026).
The most recent high-frequency reports through February suggest that the Peruvian economy has continued to perform strongly. Economy and Finance Minister José Salardi remains publicly optimistic, and last week confirmed the government’s 4% y/y growth forecast for 2025. But our forecast is less optimistic.
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