Q. Who will win Peru’s presidential runoff?
A: Pedro Castillo and Keiko Fujimori—with 19.0% and 13.4% of the votes in the first round for the presidency, respectively—are going to contest the runoff on June 6. The result of the first round was surprising, as Mr. Castillo and Mrs. Fujimori did poorly in the polls, particularly the former, and emerged as contenders—to join a long list of potential winners—only a few weeks before the first round. This means that no poll can be trusted this time, again. The polls got it extremely wrong, and we have little confidence that they will take this on board for the runoff on June 6.
Our base case is that Mrs. Fujimori, a conservative and daughter of former President Alberto Fujimori, will win. She is perceived as market-friendly, but is facing corruption allegations and the rise of anti-Fujimori sentiment, driven by the public’s ill feelings toward her father, currently in jail for corruption while in office. Mrs. Fujimori is viewed negatively by a significant part of the population. During the campaign, she has adopted more conservative positions and distanced herself from her father's administration, but whether this will help her to gain the benefit of the doubt from sceptical voters remains to be seen.
Mr. Castillo, a leftist candidate, won most of his support in remote highland areas. He promises constitutional reform, aiming to diminish the power of business elites and give the state a more dominant role in key sectors, including mining, oil, hydroelectric and communications. He has confirmed his intention to nationalise the key Camisea gas project. On social issues, Mr. Castillo is conservative, which will appeal to some sectors of the population. But fears about excessively radical nationalistic policies will probably prevent him from winning.
Andres Abadia, Chief LatAm Economist
