One of the reasons that the central bank raised rates is to try to decrease market volatility that could arise from the election results.
A lot of people were expecting Flores to do better, so there's going to be disappointment. It's going to be messy.
Either he'll do well or he'll fall flat on his face and be ousted within a year. Either way, the MAS got their chance to govern.
Political noise and the proximity of the general elections are not damping business sentiment. The strong fiscal performance reflects the buoyant economy.
The economy is detached from the political noise surrounding the electoral process.
Investors are going to shy away from Peru until they see a clearer electoral outcome. What hurts the markets more than anything is the uncertainty.
The present value of the additional public expenditures created by the measure is estimated at about three percentage points of GDP. This bill, if implemented, would also have negative consequences for the private pension system, which as of the end of 2005 had $9.5 billion in assets under management.
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