The vote tally for the Peruvian presidential election has drawn closer to the end on Tuesday, but a narrow margin between the two polarized candidates, contested ballots and accusations of fraud mean the winner could take much longer to to confirm.
Socialist Pedro Castillo, who rocked markets and miners with plans to upset the politics of the copper-rich country, held a slim lead of around 50.2% ahead of right-wing rival Keiko Fujimori with 49.8%, with nearly 96% of the votes counted. .
The leftist candidate, the son of peasants, had jumped late in the count, driven by a vigorous rural vote beyond the capital Lima. Fujimori, the descendant of a powerful political family, however began to close the gap on Tuesday, as votes abroad favored him.
The narrow gap – some 80,000 votes – and simmering tensions, with Fujimori alleging fraud and scattered marches by Castillo supporters after calling on them to “defend the vote”, meant that any end result was open to challenge.
“Peru needs her children to save her,” Castillo told supporters from a balcony on Monday evening. “We must be respectful of the popular will and I will be the first to uphold the will of the Peruvian people.”
Fujimori said she was still hopeful of closing the narrow gap on Castillo. She said there was “a clear intention to boycott the will of the people” by her party, although she offered little concrete evidence of what she called “irregularities”.
In a note, Citi said Castillo’s lead is bound to wane as overseas ballots are counted, but it would take a large turnout for Fujimori to catch up with him again. Contested ballots, he added, could be the key.
There are approximately 1,364 contested “actas” or voting tables, which probably equates to some 270,000 to 300,000 votes. They should be counted by a special commission set up by the electoral council, which could take at least a week.
If Castillo wins, investors will be looking to see if he seeks to calm the country down after the dividing election, and what his first messages are on the direction of economic policy and investment prospects, Goldman Sachs said.
Castillo has promised to reformulate the constitution to strengthen the role of the state and take more of the profits from mining companies. Fujimori is committed to following a free market model and maintaining economic stability in Peru.
Azhar Hussain, head of global credit at Royal London Asset Management, said market fears over Castillo were potentially overblown.
“The reaction (of the market) to Peru is quite low-key,” he said. “For starters, we may have found ourselves trapped in the narrative that this was a binary choice … Maybe from a political standpoint, but from an actual economic standpoint, This does not seem to be the case.”
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