(MENAFN- The Rio Times) Peru's economy expanded 3.2% year on year in August, keeping the country on track to meet the Finance Ministry's full-year forecast of roughly 3%–3.5%. Cumulative growth for January through August reached 3.3%.

The latest figures arrive just as Lima navigates another leadership crisis: Congress removed President Dina Boluarte in a unanimous impeachment vote and elevated congressional leader José Jeri to the presidency, with fresh street protests called in the days that followed.

The resilience reflects a familiar Peruvian story. Private activity-anchored by mining and reinforced by services, construction, trade, and household spending-continues to power output.

Macro guardrails have helped: the independent central bank has contained inflation, and a conservative fiscal framework has kept public debt comparatively low in the region.

Investors in the sol, bonds, and local assets have often looked through palace intrigue, wagering that core institutions and export engines will keep the economy moving.



But the political dysfunction is real and costly. Peru has cycled through multiple presidents in a decade, with several former leaders behind bars or facing trials.
Peru's Economy Strains Under Political Instability
When instability spills into the streets, the economy falters: nationwide protests and road blockades in 2023 disrupted transport and production enough to tip the country into recession.

Policy churn can also delay permits and large projects, while rising crime and illegal mining raise operating costs and risk premia. For Peruvians, the message is practical.

Economic momentum can coexist with leadership volatility when the rules of money and budgets are predictable and the tradables sector is competitive.

Yet growth is not automatic. It depends on basic public goods-security, courts, infrastructure-and on avoiding disruptions that sever supply chains or scare off investment.

For other countries, Peru 's experience is a caution and a guide. Independent economic institutions and clear, stable rules can cushion political shocks and let the private sector do most of the heavy lifting.

But governance still matters: when order breaks down, the bill comes due quickly. In a world of frequent political swings, the countries that ring-fence their economic“dashboard” while focusing government on essentials are likely to ride out the storms with less damage.

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