Peru’s Fujimori holds tight lead in vote, Castillo narrowing gap

Supporters of Peru's presidential candidate Keiko Fujimori react in Lima, Peru

Conservative Keiko Fujimori was clinging to a razor-thin lead in Peru’s presidential election race early on Monday but socialist rival Castillo Pedro was narrowing the gap, setting up a likely photo finish.

Uncertainty pervades a deeply polarized Peru over who will be its next president, with the official count showing Fujimori with 50.5% and Castillo on around 49.5%, with around 90% of the vote counted and the gap narrowing with late votes expected to be more rural, favoring the leftist candidate.

An unofficial fast count late on Sunday by Ipsos Peru gave Castillo a fractional lead after an exit poll had said rival Fujimori would eke out a win, leaving the copper-rich Andean country, investors and mining firms guessing.

The likely photo finish could lead to days of uncertainty and tension, with the vote underscoring a sharp divide between capital city Lima and the nation’s rural hinterland that has propelled Castillo’s unexpected rise.

Lucia Dammert, a Peruvian academic based in Chile, predicted that the coming days would be febrile, with potential challenges to the votes and requests for recounts. She forecast protests particularly if Fujimori were to win.

“What is clear is that if Keiko wins she is going to have to shut herself up in a fortress in Lima and just stomach what will happen in the rest of the country,” she said.

As first results trickled in on Sunday evening, 51-year-old Castillo, the son of peasant farmers who has pledged to shake up Peru’s constitution and mining laws, had rallied supporters to “defend the vote”, though later called for calm.

Fujimori, 46, the daughter of ex-president Alberto Fujimori, who is in jail for human rights abuses and corruption, also appealed for “prudence, calm and peace from both groups”.

‘HEIGHTENED UNCERTAINTY’

J.P. Morgan said in a note that it could be days before the final outcome of the election was clear, and the two candidates might opt to wait for this process to finish before declaring victory or conceding defeat.

On Monday morning, Fujimori had 8.1 million votes to Castillo’s 8 million, with a gap of 135,116 that was steadily narrowing. The slower-to-count rural vote is expected to help Castillo, though uncounted overseas ballots could aid Fujimori.

“Unless the too-close-to-call scenario depicted by the quick count proves wrong, we seem poised for a number of days of heightened uncertainty ahead,” J.P. Morgan said.

The tense election, which came after Peru went through three presidents in a week last year, has buffeted its currency and debt markets, while mining firms fear Castillo could usher in more state intervention in the sector.

Analysts also say, however, that whoever wins will have a weakened mandate given the sharp divisions in Peru, and will face a fragmented Congress with no one party holding a majority, potentially stalling any major reforms.

The two candidates pledged vastly different remedies for a country that has suffered corruption scandals in recent years and a sharp economic slump brought on by the world’s deadliest per capita COVID-19 outbreak.

Fujimori has pledged to follow the free-market model and maintain economic stability in Peru, the world’s second largest copper producer, with a “a mother’s firm hand.” nL2N2NL2KR

Castillo, who has become a champion for the poor, has promised to redraft the constitution to strengthen the role of the state and take a larger portion of profits from mining firms.

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