In its current election, Peru will likely decide between two relatively similar market friendly candidates, Keiko Fujimori and Pedro Pablo Kuczynski.
Rather than one candidate offering the markets more investment opportunities, under either candidate the status quo would likely be preserved.
Despite the fact that Fujimori has stated that she would issue fresh debt to fund infrastructure projects within the country, investment opportunities are unlikely to change.
“Neither candidate is likely to create additional significant investment opportunities for international investors,” said Andres Correa, Associate at Greylock Capital Management.
There will however likely be continued smaller investment opportunities for international lenders as each candidate will look to boost economic growth.
“Peru’s growth has slowed due to lower commodity prices and the current global macroeconomic situation, but borrowing to finance the development of certain projects may be a way to get country back on the path to solid growth,” Correa noted.
Peru has experienced a period of relative economic stability over the past 10 years; however the diversification of the economy away from a reliance on commodity exports will be necessary.
Despite this Correa stated that regardless of the over-reliance on commodities, Peru is still likely to continue on the positive economic trend it has experienced over the past decade.
“This trend has proved to be good for foreign investment, which is likely to continue in the future.”
He added that foreign borrowing by Peru would benefit the economy as long as the country’s GDP continued to grow.