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Peru Leader Names Ex-Central Bank Official as Economy Minister

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(Bloomberg) — Peru’s new President Dina Boluarte named a US-educated economist who has spent most of his career at the central bank as economy minister, as she tries to restore calm after the turmoil of recent days.

Alex Contreras was deputy economy minister under former President Pedro Castillo, who was ousted on Dec. 7. Contreras worked at the central bank between 2007 and 2019, according to his resume on the ministry’s website. He has also taught Macroeconomics, Monetary Theory, Statistics and Econometrics in local universities.

Read more: Backers of Ousted Peru President Block Roads as Protests Spread

Boluarte is trying to seek allies and establish her authority after the chaos triggered by Castillo’s attempt to dissolve congress. Peru’s stocks, bonds and currency initially slumped as the constitutional crisis unfolded, then rebounded when Castillo was impeached and then arrested hours later.

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Boluarte named Oscar Vera as her Mining and Energy Minister. Vera is a chemical engineer who previously worked at the state oil company Petroperu, according to newspaper La Republica. She also named Pedro Angulo, a former prosecutor, to be her prime minister.

Supporters of Castillo are blocking highways in some regions, according to the nation’s transport authority, to demand his release from detention and new elections. These include a strategically important road that links southern provinces where agro-industrial exports such as blueberries and grapes are produced, with Callao, Peru’s biggest port, as well as with the capital.

The demonstrations pose a challenge to Boluarte as she tries to reimpose order. Since the new president doesn’t have a party in congress, she is also at risk of being ousted before her term expires in 2026, if she is unable to get a grip on the situation. Boluarte is the nation’s sixth leader since the start of 2018.

Read more: Peru Castillo Risks 20-Year Sentence as Mexico Offers Asylum

Castillo’s approval ratings had fallen to about 25% by the time he was impeached, but he did still enjoy significant backing among the poorest farmers and some other groups such as teachers.

Read more: Impeached, Jailed, Wanted: President Is a Dangerous Job in Peru

(Corrects spelling of Prime Minister’s first name in fourth paragraph.)

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The UK labor strikes are years in the making – Vox.com

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The UK labor strikes are years in the making  Vox.com

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Bond correction coming: What an economist and an investor say about inflation – Financial Post

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Bond correction coming: What an economist and an investor say about inflation  Financial Post

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Freeland meets with provincial, territorial finance ministers in Toronto

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TORONTO — Deputy Prime Minister and Finance Minister Chrystia Freeland is hosting an in-person meeting Friday with the provincial and territorial finance ministers in Toronto to discuss issues including the current economic environment and the transition to a clean economy.

The meeting will focus on the economic situation both domestically and globally, according to a federal source with knowledge of the gathering, including discussions on how to provide incentives and supports to be competitive with the U.S.’s Inflation Reduction Act.

U.S. President Joe Biden’s Inflation Reduction Act includes electric-vehicle incentives that favour manufacturers in Canada and Mexico, as well as the U.S.

The incentives, which were already revised to include Canada and Mexico after originally focusing on the U.S., are now facing criticism from Europe about North American protectionism.

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The source, who spoke on the condition they not be named to discuss matters not yet made public said the ongoing challenges with health care in Canada will also come up at the meeting. More substantive discussions on that will be held next week when the prime minister meets with premiers on Feb. 7.

In her opening remarks, Freeland said it’s essential for Canada to have its rightful place in the transition to a clean economy, calling it one of the biggest challenges of the moment.

We are in a situation with a lot of economic uncertainty globally, said Freeland, adding that later in the day, the ministers will have a discussion with Bank of Canada governor Tiff Macklem.

“I think that conversation with the governor will be useful and important for all of us,” she said.

Despite the need to address health care challenges, Canadian jobs and the transition to a clean economy, Freeland said the government recognizes it also has to contend with real fiscal constraints.

Freeland will hold a closing news conference at 3:30 p.m. local time.

The meeting comes at a tense time for many Canadian consumers, with inflation still running hot and interest rates much higher than they were a year ago.

The Bank of Canada raised its key interest rate again last week, bringing it to 4.5 per cent, but signalled it’s taking a pause to let the impact of its aggressive hiking cycle sink in.

The economy is showing signs of slowing, but inflation was still high at 6.3 per cent in December, with food prices in particular remaining elevated year over year.

Interest rates have put a damper on the housing market, sending prices and sales downward for months on end even as the cost of renting went up in 2022.

Meanwhile, the labour market has remained strong, with the unemployment rate nearing record lows in December at five per cent.

— With files from Nojoud Al Mallees in Ottawa and James McCarten in Washington

This report by The Canadian Press was first published Feb. 3, 2023.

 

The Canadian Press

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