Congress ousts President Dina Boluarte; José Jerí is appointed as caretaker president; political uncertainty to drive economic slowdown in Q4; we revise our PEN/USD spot rate to project less PEN weakening

PERU - Report 21 Oct 2025 by Alfredo Thorne

In this report, we focus on the ouster of President Dina Boluarte; the appointment of José Jerí as caretaker president to serve out her term; the protests in response to these developments; and the likely economic and market consequences.

First, we discuss politics: the drivers of congressional impeachment of Boluarte, and the appointment of President of Congress Jerí as caretaker president until July 28th, 2026, the end of Boluarte’s term. For many, this is an atypical constitutional transition. Nevertheless, as we have argued in previous reports, Peru has become a de facto parliamentary regime, similar to some European countries. This has led to confrontation between the right and left-wing coalitions in Congress, with each vying to appoint its preferred candidate as acting president, with the ensuing civil unrest leading to the death of at least one person.

Next, we focus on the economy. First, we review the most recent economic reports, and argue that during September there have been signs of economic deceleration, but that the economy nevertheless remains solid. Our forecast projects greater deceleration in Q4, with real GDP forecast to grow 2% on average.

Finally, we turn to local markets. We review the policy decision taken by the Banco Central de Reserva del Perú (BCRP, the Central Bank) to stand pat at its October 9th meeting. We argue that this was unsurprising, and retain our forecast for one more cut at the BCRP Board’s December meeting. We suggest that the absence of a local market selloff is due to the removal of the chaotic Boluarte government, and the election of right-wing president Jerí. We suggest that local markets will remain supported, and have revised our PEN/USD spot exchange rate forecast to PEN3.5/USD at end-2025 (from PEN3.6), and to PEN3.55 at end-2026 (from PEN3.7).

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