Overall, there is a great consensus among the candidates’ proposals (see Figure 1). Most aim to preserve the current macroeconomic policy framework, including: A responsible fiscal policy; an independent monetary policy enforced by the central bank; and the promotion of private investment. All candidates will pursue a tax reform, as they seek to increase revenues and the formalization of the economy. And only Toledo and Humala want to increase the royalty taxes that mining companies pay to the government, in order to support social spending.
RGE maintains the view that continuity in economic policy is the most likely outcome in Peru. So far, poll dynamics show that even if Humala, who is seen as the most radical candidate, goes through to the second round, he will lose to one of the four main candidates. Moreover, the next Congress will be very fragmented, reducing Humala’s ability to pass laws without negotiating with other parties. However, markets should expect a bumpy ride as we approach election day on April 10, and then the second round of voting on June 5.
Economic Proposals of Main Candidates
Editor’s Note: This post is excerpted from a much longer analysis available exclusively to RGE clients, Radical Presidential Candidate Advances in Peru Polls.