Francisco Sagasti to swear-in as new president

PERU - In Brief 17 Nov 2020 by Alfredo Thorne

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Last night and after a tense weekend, Congress decided to elect Francisco Sagasti from the Purple Party as its new head and Ms. Mirtha Vásquez, from the leftist Frente Amplio Party as the vice-president. With former president Manuel Merino resigning as a result of the street protests, Mr. Sagasti would swear-in as the new president today at 4pm Lima time and Ms. Mirtha Vasquez as Congress' head. Our assessment is that Mr. Sagasti is an excellent outcome. He is an academic that decided to enter politics recently and has a PhD in Operational Research from Pennsylvania University. Although we would like to hear his speech today at 4pm and his new Cabinet that is due tonight, our sense is that he would favor disciplined policies. Although Congress remains controlled by populist legislators, street protesters have corner them and Sagasti has an upper hand in the negotiations. In his press comments he has already dismissed the possibility of signing into Law the two pension bills approved in Congress. The key is the 2021 Budget that is due November 30th and we anticipate a positive outcome. Consistent with this view we have adjusted the probabilities that we assigned to populist legislation being approved in Table 1 in our report that was sent yesterday. We have revised the probabilities in the attached revised Table 1. We would keep you posted of developments.Table 1 new