Election Too Close To Call, Focus On Whether Mendoza Makes 2nd Round

Peru's electorate head to the polls on Sunday 11 April in one of the most uncertain elections in years, with no clear sign of which two presidential candidates are likely to make the second round run-off, set to take place on 6 June.

• Opinion polls (see chart below) offer little in the way of a concrete indication of which of the plethora of candidates are likely to make the second round run-off. It is almost guaranteed that no single candidate will win 50%+1 of the vote, making a run-off a necessity.

Chart 1. Presidential Election Opinion Polling - First Round, %

Source: IEP, IDICE, Ipsos, CPI, Datum, Radio Latina, CELAG, CIT, MNI

• Market focus will likely be on whether leftist candidate Veronika Mendoza from the Together for Peru (JP) coalition makes it into the second round. Mendoza is the most high-profile candidate to advocate for major tax hikes on wealthy individuals. The more market-friendly second round scenario would be for two of the following to go through:
  • Centrist Popular Action candidate Yohny Lescano
  • Former central bank governor Hernando de Soto from the Avanza Pais alliance
  • From the right-wing Popular Force, former presidential candidate Keiko Fujimori, daughter of Peru's authoritarian 1990s president, Alberto Fujimori.
  • Cesar Acuna from the centre-right Alliance for Progress
• Even in the event two more market-friendly participants reach the second round, the congressional elections taking place this Sunday are likely to result in a fractured and unwieldy legislature (20 parties are contesting for 130 seats in the Congress).
• After a year of protests, mass COVID-19 fatalities, and a week-and-a-half when three different presidents held office, there is no guarantee that a new administration will be able to contain Peru's febrile political and social atmosphere. The most popular choice in many opinion polls throughout the campaign has been 'none of the above'.