Political and economic developments in Peru and Chile

In Peru and Chile, regional and national leaders are addressing economic and security concerns through legislative and budgetary demands.

In Peru, initial focus centered on regional economic disparities, with lawmakers seeking increased budget allocations for the San Martín region and the Amazon to support micro and small enterprises and fiscal decentralization. This evolved into broader political debates regarding the administration of President Keiko Fujimori. Prime Minister Luis Galarreta asserted the government would fulfill campaign promises despite potential legislative friction, though critics have noted the President’s relative silence during cabinet sessions.

More recently, labor tensions emerged involving the EsSalud Workers' Federation. Following the appointment of Zulema Tomás as the new president of EsSalud, Prime Minister Galarreta has since shifted focus toward fiscal management. He defended the potential request for new supplementary credit to address stalled public works and pending budgetary needs, arguing that the previous administration left a “hole” in public accounts. Galarreta emphasized that Peru’s macroeconomic stability is preserved by low debt levels and the autonomy of the Central Reserve Bank of Peru (BCRP).

In Chile, regional demands initially targeted specific infrastructure and security funding. National discourse subsequently shifted toward economic instability and security reforms. Legislative efforts are now moving toward significant market and housing reforms. The Chamber of Deputies' Finance Commission is set to vote on the MK4 bill, which proposes creating a National Housing Fund (Fonavi) potentially worth US$20 billion to facilitate mortgage credits. The reform also aims to strengthen capital markets by eliminating VAT on financial service exports and expanding tax exemptions on capital gains.