Peru engulfed in chaos

Peru’s newly-inaugurated President Boluarte’s call to bring forward the next general election to 2024 has failed to pacify protesters who took to the streets following the impeachment of President Castillo last week. The unrest is already causing economic damage, and the fallout will be even larger if protests start to impact mining activity. If the government decides to loosen the purse strings to appease protesters, that could put Peru’s public finances – which are currently still in decent shape – under strain. And the longer the protests drag on, the higher the risk that they lead to shortages, which would put further upward pressure on inflation, forcing the central bank to keep interest rates higher for longer.