The impeachment of Peru’s president, Martín Vizcarra, has rattled the country’s financial markets and may pave the way for looser (and more populist) fiscal measures in the coming months. Given the country’s strong balance sheet, such policies should have a positive effect on economic growth in the near term. But these latest political events add to the impression that political instability is here to stay, which may depress private investment and the country’s longer-term prospects.
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