The Return Of Fujimorismo: Peru’s New Government And Its Economic Ambitions

On July 28, 2026, conservative politician and daughter of former president Alberto Fujimori, Keiko Fujimori, will take office as President of Peru following an extremely close election in which she defeated Roberto Sánchez, a former minister of then-President Pedro Castillo. Keiko's victory continues a streak of wins by right-wing candidates in Latin America, including in Colombia, Chile, Costa Rica, Bolivia, Ecuador, and Argentina's midterm elections.

For decades, the Peruvian economy has been characterized by conservative fiscal management and economic policies that have driven strong economic growth, marked by the attraction of foreign investment. Recently, the Peruvian economy has been recovering from the effects of the COVID-19 pandemic as well as the concerns surrounding the election of the previous administration led by Pedro Castillo, the social protests that erupted between late 2023 and early 2024, and successive changes in administration. The Peruvian economy is showing signs of growth after expanding by 3.4% in 2025 and 3.5% in 2024. In recent years, Peru's inflation rate has remained below global averages and those of developed and emerging economies.

However, certain problems persist. In recent years, the fiscal deficit has remained at 2%, 70% of the population works in the informal sector, and there has been an increase in public safety concerns and crime, as well as incidents of corruption and illegal mining.

Background on investment promotion policy

Looking ahead, private investment, including foreign investment, is expected to play a leading role in the new administration. Keiko Fujimori's proposal is rooted in the economic foundations of her father's administration in the 1990s, during which economic and legal reforms were implemented that enabled economic growth, the reintegration of the Peruvian economy into international markets, and the promotion of foreign investment.

During that administration, guarantees for foreign investment were established through Legislative Decrees Nos. 662 and 757, which included the elimination of the requirement for authorization of foreign investment, equal rights for foreign and domestic investors, freedom of trade, the free transfer of convertible currency abroad without prior government authorization, and agreements ensuring the stability of the tax regime. Key sector-specific laws were also enacted, such as the Infrastructure Concessions Act, the General Mining Act, the Organic Law on Hydrocarbons and the Electricity Concessions Act. At the time, the privatization of state-owned enterprises took place, including the privatization of Peru's electricity, mining, and telecommunications sector. Major stability agreements were also signed, Peru acceded to the ICSID Convention, and key bilateral investment agreements were signed, several of which remain in force today.

Undoubtedly, foreign investment is expected to remain one of the fundamental pillars of the strategy of Keiko Fujimori's new administration. In fact, the government's plan, Peru with Order (the “Fujimori Plan”) (available here), proposes continuing along the path of a free-market economy and calls for, among other things, a deregulatory “shock” to the Peruvian economy. Keiko Fujimori’s goal is to reduce the processing times for investment projects, with the aim of cutting these times by 40%. As part of this effort, the plan calls for reducing the regulatory burden and eliminating redundant procedures. Similar proposals have also been advanced in Chile by President Kast (see our previous analysis here).

Mining

In Peru, mining plays a dominant role in the economy. It accounts for nearly 10% of Peru's GDP and is a major source of exports and employment. According to the World Bank, mineral exports totaled US$61.8 billion in 2025. Peru is the world's third-largest producer of copper; the second-largest producer of zinc, silver, and molybdenum; the fourth-largest producer of tin, and the eighth-largest producer of gold. Keiko Fujimori's Plan proposes establishing fast-track mechanisms for the approval of permits and authorizations for strategic mining projects, as well as providing tax incentives for the reinvestment of profits from mining projects. Additionally, the Fujimori Plan proposes to improve connectivity and infrastructure in mining project areas by prioritizing road and rail corridors to connect them with ports and markets; it also proposes promoting public-private partnerships and "works-for-taxes" programs for infrastructure development in areas linked to mining projects.

Interestingly, the Fujimori Plan proposes amending the General Mining Law by establishing mandatory time limits for mining exploration and exploitation, with the aim of preventing speculation. This is a measure that must be carefully evaluated to avoid conflicting with the rights and guarantees that foreign investors may have.

Oil & Gas

The hydrocarbons sector has been sidelined in recent years. Oil production and investment have declined considerably. Part of this situation may be due to the circumstances surrounding the state-owned company Petróleos del Perú (Petroperú), which has been involved in privatization attempts in recent months. The Fujimori Plan calls for the company to focus on refining and distribution activities and proposes the sale of non-strategic assets. It also proposes transferring the management of the Norperuano Oil Pipeline to a specialized private operator.

Similarly, efforts will be made to promote the exploration and exploitation of oil blocks in the Amazon and along the Northern coast, where certain exploration projects are underway. The Fujimori plan also calls for the promotion of the Southern Andean Gas Pipeline. This gas pipeline would seek to replicate the Southern Peruvian Gas Pipeline project, which was terminated by the Peruvian government in 2017 and would transport natural gas from Cusco to the South Coast of Peru.

Power

Peru has a national interconnected electricity system divided into generation, transmission, and distribution to households and customers. The generation system consists mainly of various hydroelectric and thermoelectric power plants that operate from gas extracted from the region of Camisea (in Cusco). The Fujimori Plan focuses on promoting non-conventional renewable energy sources (solar, wind, geothermal, and biomass as well as green hydrogen), with the goal of increasing the share of sustainable electricity by 20%. The Fujimori Plan however provides no details on how the promotion of these energy sources would be carried out.

Regarding transmission, the Fujimori Plan proposes accelerating the implementation of US$3 billion in transmission projects to strengthen the power grid. As for distribution, it proposes incorporating regional state-owned electricity distribution companies into public-private partnerships. The Fujimori Plan also proposes the creation of the “Northern Energy Hub” to establish energy generation, transmission and distribution infrastructure and to create industrial clusters in the North of Peru.

Finally, across all these sectors, a fast-track mechanism is proposed to be run by Congress for the approval of large strategic energy projects.

Major Infrastructure Projects

Peru's geographical area is four times that of the United Kingdom and twice that of Spain. Peru has a significant public infrastructure deficit (roads, railways, ports, airports). The Fujimori Plan proposes the implementation of a series of ambitious infrastructure projects. However, little clarity is provided on the contractual arrangements under which these projects will be implemented, whether through public works, public-private partnerships, or government-to-government contracts.

As to the construction of new roads, the Fujimori Plan proposes the execution and completion of major priority highway projects, including the New Central Highway (which would connect Lima with the Central hub of Peru). It also proposes the completion of metro lines in the city of Lima, the promotion of the Peru-Brazil bi-oceanic railway, and rail corridors connecting the major ports in the country (Callao, Chancay, Pisco, Salaverry and Ilo).

The Fujimori Plan also proposes the expansion, strengthening, and modernization of Peru's main ports and airports and the development of new airports, as well as the establishment of special economic zones with temporary tax benefits and the construction of water treatment plants and major irrigation projects.

Feasibility of the Proposals

Although the government's program is ambitious, the political situation in Peru in recent years have been impacted by frequent changes in the presidency. This has been caused in part by the lack of a parliamentary caucus with sufficient votes to withstand impeachment in Congress. Unlike her predecessors, Keiko Fujimori has a parliamentary bloc that would make it difficult for her to be impeached by the legislature. The adoption of a bicameral legislative structure constitutes an additional layer that could further complicate impeachment proceedings, although Peru's recent political history has been marked by persistent and unpredictable volatility, and any assessment of institutional stability should be made with appropriate caution.

Keiko Fujimori's party, Fuerza Popular, will be one of the major forces in Congress, but it will need to build coalitions with like-minded parties (such as Renovación Popular and the Good Government Party) to secure the majority required to pass certain proposals.

Key Takeaways

Keiko Fujimori’s presidency would represent a significant break from the policy approach advocated by her opponent, Roberto Sánchez, who campaigned on a platform broadly aligned with the agenda of former President Castillo. While Keiko Fujimori has outlined an ambitious reform program, its implementation will hinge on her capacity to forge durable alliances with like-minded political and social actors and to secure continued public backing. These factors will be critical, in light of the deeply divided electorate and the exceptionally narrow margin of victory, which was fewer than 50,000 votes.

We will continue to monitor developments in Peru and encourage you to subscribe to stay informed of the latest developments. Please contact the authors or your usual Herbert Smith Freehills Kramer contacts for more information.