- Peru: New Finance Minister, what does it mean?; Home sales soar past expectations in 1Q25
PERU: NEW FINANCE MINISTER, WHAT DOES IT MEAN?
We had already written this note on the new Finance Minister, Raúl Pérez-Reyes, when news came out that the head of the cabinet, Gustavo Adrianzén, had resigned. This means that the whole cabinet must quit and while many cabinet members can be ratified, it gives President Boluarte the opportunity to reshuffle. A couple of names are being voiced to replace Adrianzen, but the news at this point seems to have to high a quota of speculation to delve into the names.
Prior to Adrianzén’s resignation, President Boluarte hat removed two cabinet members: the Finance Minister and the Minister of the Interior, and has moved Raúl Peréz-Reyes from the Ministry of Transportation to the Ministry of Finance.
We had already noted that the timing had been curious, as the removals came as cabinet head Gustavo Adrianzén was being called to Congress for impeachment procedures. Apparently, Adrianzén resigned to avoid his impeachment. The three cabinet changes made earlier on May 13 do not seem to be linked the Adrianzén impeachment process, and are now at risk of finding their tenures shortened.
At the same time, there is a good chance that the newly appointed cabinet members may continue. Of the changes made on May 13th, the one that stands out was the removal of José Salardi from the Ministry of Finance. Salardi has been replaced by Raúl Pérez-Reyes, formerly the Minister of Transportation, and one of the more serious and prestigious members of the Adrianzén cabinet. He is an economist and has been a very sensible cabinet member who had frequently taken upon himself the role of spokesperson for the Boluarte administration.
Although it is too soon to know what Pérez-Reyes plans to do, and to evaluate him in depth as an economic policy maker, in general we see little cause for concern over Pérez-Reyes as Salardi’s replacement. But we do wonder about the reasons for the removal of Salardi. The rumour mill is running full tilt speculating on why Salardi was ousted. He did not seem to be at risk. He didn’t seem like a contentious person within the cabinet, although one can never be certain about internal relationships and aversions. However, rather than adding to the rumour mill, we shall focus on what his removal might mean to policy.
Salardi was widely viewed as a decent finance minister with a proper handle on economic management. This does not appear to have been enough for President Boluarte. Economic management per se, then, does not appear to be of foremost interest for the Boluarte administration.
Salardi’s tenure focused on promoting infrastructure investment, especially through Proinversión, the State entity in charge of formulating and tendering infrastructure projects. There is no reason to believe that Minister Pérez-Reyes will change what Proinversión is doing per se. Having said that, whether the Ministry of Finance, MEF, continues to give infrastructure projects the level of backing that Salardi did will depend a lot on whether Pérez-Reyes retains Vice-Minister Denisse Miralles. Miralles, who worked previously at Proinversión, together with Salardi, is the main remaining link between the Ministry of Finance and Proinversión.
Another fixture of Salardi’s time at the MEF was a broad effort to de-regulate private and public investment. It is not clear what Minister Pérez-Reyes’ stance is on de-regulation. He may continue to favour the effort, although perhaps not with the same energy or insights.
Salardi had also been championing awarding tax benefits to industrial parks, and to investment surrounding the new Chancay port. Pérez-Reyes has showed little interest in this as Minister of Transportation, which suggest he could be less proactive. However, the issue is being visited by Congress, and if a bill emerges, Pérez-Reyes would conceivably go along with it.
Raúl Pérez-Reyes is a 60 year-old economist. He is one of the longest-serving cabinet members of the Boluarte regime, having begun as Minister of Production in January 2023, before moving to Minister of Transportation, and now at the MEF. His longevity as a cabinet member in the face of a Congress that has been very prone to impeaching cabinet members shows his political acumen, which is something that, perhaps, Salardi did not have.
The MEF has a long history of maintaining macroeconomic stability. Both Salardi and José Arista before him, were, perhaps, more interested in stimulating growth than in complying with the legal fiscal deficit limits, although they never put fiscal management at risk. It’s not clear exactly how important reducing the fiscal deficit will be for Pérez-Reyes, but there is no particular reason to be concerned. Especially not with metal prices playing in his favour. Overall, if Pérez-Reyes has lasted as long as he has as part of the Boluarte administration, it is in large part because he has avoided rocking the boat.
—Guillermo Arbe
HOME SALES SOAR PAST EXPECTATIONS IN 1Q25
The real estate sector exceeded our expectations in 1Q25. According to statistics from the Superintendencia de Banca y Seguros (SBS), the placement of new mortgage loans in the banking system reached 9,790, marking a 36.5% increase in 1Q25. This is the highest quarterly figure since 4Q21.
Several factors contributed to this significant growth. Notably, there was a gradual reduction in the average mortgage rate within the banking system, which closed at 7.75% in April, its lowest level since May 2022. This trend followed the decrease in the Central Bank’s reference rate, currently at 4.50%, and the yield on the local 10-year bond, which closed at 6.55% at the end of April. As a result, mortgage rates are now below their historical average. Additionally, the recent improvement in formal employment, particularly in the private sector, and lower inflationary pressures have increased the willingness of individuals to invest in new homes. These factors have collectively stimulated borrowing for new housing. It is also worth noting that there were two additional working days in March this year, as the two Easter holidays in March 2024 fell in April in 2025.
The results were driven by increased sales of high-end homes, especially in Lima. Conversely, sales of public housing declined during the first two months of the year. For instance, according to the Association of Real Estate Companies of Peru (Asociacion de Empresas Inmobiliarias, ASEI), home sales in Lima rose by 30% in the 1Q25, totaling 6,237 homes—this figure exceeded our expectations and is the highest recorded quarterly figure since data became available in 2019 (chart 1). The lower mortgage rates, coupled with a notable improvement in formal employment, particularly in Lima, and a sustained supply of new housing at relatively stable average prices, all contributed to heightened demand for new homes (chart 2).

However, the sales of social housing have seen a decline in recent months. The placement of New Mivivienda loans, a proxy for social housing sales, dropped by 8% during the first two months of the year, marking the third consecutive month of annual decline as of February. Restrictions on granting loans for higher-end social housing, alongside challenges in developing new social housing projects in certain districts of Lima, may have adversely affected the performance of this sector. Nevertheless, this trend could potentially reverse in the coming months due to the early availability of public funds for loan placements in this sector, a situation that did not occur in previous years.
Looking ahead, we expect the real estate sector to experience growth again this year. Specifically, we anticipate approximately 36,000 new mortgage loans to be issued, an increase of about 8% compared to 2024. Our forecast assumes greater dynamism in sales in 1H25. However, in 2H25, the decision to purchase new homes could be influenced by the approaching 2026 elections. By segment, we expect sales of new homes in Lima to grow by around 10% in 2025, potentially reaching nearly 24,000 homes sold. If realized, this would represent the highest annual sales since 2019, based on ASEI figures. Lastly, we anticipate that sales of social housing will also contribute to sector growth this year, as, despite a weak performance in February, sales in this segment are expected to rebound due to the early availability of public funds.
—Carlos Asmat
DISCLAIMER
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.