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Peru’s Transition Government Faces Economic Strain Veiled by Surging Mineral Prices

Analysts warn political churn has slashed potential growth, eroded competitiveness, stalling investment.

Overview

  • José Jerí governs with a technocratic but politically weak cabinet after a new vacancy, and its survival hinges on an unpredictable Congress.
  • Pedro Pablo Kuczynski argues the current stability rests on unusually high export prices—copper above $5 per pound and gold over $4,000 per ounce—which conceal uncertainty.
  • Potential GDP has fallen from above 6% in 2011 to below 3% today, and Peru’s competitiveness has slid to 23rd from ninth a decade ago, with state efficiency flagged as a drag.
  • Private investment remains subdued and short‑term capital that exited in 2021 has not returned, while public works stall and major mining reinvestments move slowly.
  • Kuczynski highlights internationalized crime and sizable youth emigration near one million in recent years, warning that voter frustration could favor demagogic outcomes in elections about five months away.