Keiko Fujimori Sworn In as Peru's First Female President with Pledges on Wage, Infrastructure and Security

Fujimori's Inauguration Restores Fujimorismo to Peru's Presidency

Keiko Fujimori was sworn in as Peru's president on 28 July, making her the first woman to hold the office and returning her father Alberto Fujimori's political movement to power after a 26-year absence. She won a razor-thin second-round victory over leftist rival Roberto Sánchez, with a margin of less than 50,000 votes. The inauguration ceremony in Lima's Congress was attended by dignitaries including Spain's King Felipe VI, U.S. Vice Secretary of State Christopher Landau, and eight Latin American heads of state. Opposition lawmakers staged a walkout before her speech, underlining the political polarisation that will define her administration.

In her first address to the nation, Fujimori outlined at least six concrete measures. She promised to raise the monthly minimum wage to 1,300 soles and provide a compensatory bonus for micro and small enterprises. She also announced plans to build metro systems in the cities of Arequipa, Piura and Trujillo, and vowed to deploy the armed forces to high-crime zones under a state of emergency. On security, she pledged zero tolerance for police misconduct and called for national unity to tackle the threat of a new El Niño weather phenomenon and rampant insecurity.

The new president had earlier used pre-inauguration meetings with U.S. officials and international lenders to signal openness to foreign investment and cooperation on security and technology. An Ipsos poll just before the transition showed 71% of Peruvians willing to give her government a chance, though only 37% expressed optimism and 39% registered concern, reflecting the deep divisions she must now navigate.

What Keiko Fujimori's Policy Agenda Means for Peru's Business Climate

A Narrow Mandate in a Polarised Country

Fujimori's victory margin of under 50,000 votes — in a country of 34 million — leaves her with limited political capital. The walkout by opposition legislators during her inaugural address signals that building the legislative coalitions needed to pass her agenda will be an uphill battle. The poll numbers amplify the challenge: while a majority are willing to give her a chance, a significant share are already concerned. Her ability to govern effectively will depend on whether she can extend an olive branch to opponents and avoid the authoritarian overtones that marked her father's decade in power.

Minimum Wage Hike: A Double-Edged Sword

The headline economic pledge — a minimum wage increase to 1,300 soles (roughly $350) per month, accompanied by a bonus for micro and small businesses — is aimed at boosting household purchasing power and addressing inequality. However, it raises immediate cost pressures for Peru's large informal sector and for formal small businesses that already struggle with high compliance costs. Without a credible funding mechanism for the compensatory bonus or measures to improve productivity, the policy risks fuelling inflation or driving more employment into informality. Investors in labour-intensive sectors such as agribusiness, textiles and retail will need to watch how the measure is implemented.

Infrastructure and Security: Short-Term Wins, Long-Term Questions

Fujimori's pledge to build metro systems in Arequipa, Piura and Trujillo — three major cities outside Lima — addresses a long-standing infrastructure gap. If realised, these projects would create near-term construction jobs and could improve long-term urban productivity. But with Peru's fiscal space limited and the government's track record on megaproject delivery patchy, the risk of delays, cost overruns or outright cancellation is high. Her security strategy — deploying the military to crime hotspots and cracking down on police corruption — echoes populist approaches elsewhere in Latin America. While it may generate short-term public relief, it raises constitutional and human rights concerns that could draw international criticism and complicate relations with foreign partners.

International Signals: Seeking Investment Amid Political Uncertainty

Fujimori's meetings with U.S. Vice Secretary Landau and a CAF development bank executive signal a pragmatic push to reassure investors and multilateral lenders. The emphasis on cooperation in security, technology and institutional strengthening suggests continuity with the market-friendly policies that have historically attracted foreign capital to Peru's mining, energy and infrastructure sectors. However, the ultimate test will be whether her government can translate these signals into clear regulatory stability, particularly after the political turbulence of recent years.

Implications for Companies and Investors Operating in Peru

• Labour cost planning: If the minimum wage hike proceeds as announced, companies with large workforces in Peru should begin modelling the impact on payroll costs, especially if they operate in agriculture, retail, manufacturing or services. The promised compensatory bonus for micro and small enterprises is still undefined — engage with industry associations to monitor the legislation.
• Infrastructure pipeline: The three new metro projects represent a potential pipeline of construction and engineering contracts. International firms with experience in urban transit should track the pre-feasibility and bidding timelines, but factor in a high probability of delays given past project execution challenges.
• Political risk management: The narrow electoral victory and visible congressional opposition raise the risk of policy gridlock or social unrest, particularly if the security crackdown triggers backlash. Companies with operations in Peru should stress-test their political risk scenarios and review crisis contingency plans.
• Investment climate monitoring: While the initial signals to Washington and multilateral lenders are market-friendly, tangible indicators — such as the composition of the first cabinet and the government's approach to mining royalties or tax incentives — will be the real litmus test for investor confidence. The first 100 days will be critical.