Peru’s Finance Minister Looks Safe From Cabinet Changes, PM Says

(Bloomberg) -- Peru's strong economic performance is shoring up the status of Finance Minister Pedro Francke ahead of possible cabinet changes, according to the prime minister.

“The Finance Ministry is one of the most solid positions at the moment because the data show that our economy has performed well, despite the circumstances,” Prime Minister Mirtha Vasquez said in an interview at the presidential palace on Tuesday. “I have not seen any intention by the president to change the finance minister.”

Former World Bank economist Francke is popular with investors, though less so with members of President Pedro Castillo's Peru Libre party. In recent weeks, Castillo's advisers have sought candidates to replace Francke, as the opposition and senior figures in Castillo's party call for a major overhaul of the cabinet, according to three people familiar with the matter.

Vasquez said she doesn't rule out cabinet tweaks, though any such changes are likely to be minimal, and that Castillo places a high value on stability.

Vasquez is Castillo's second prime minister, who he appointed in October in a bid to improve his government's relations with congress in the politically-volatile nation. Like Francke, she is herself among the cabinet members that Peru Libre's radicals would like to get rid of.

Peru's economy grew 12.6% last year, the most in Latin America, according to estimates from analysts surveyed by Bloomberg. Francke, Vasquez and Central Bank chief Julio Velarde have helped calm the nerves of investors who are worried about the country's direction under Castillo.

Vasquez said Castillo hasn't abandoned the proposals of his Peru Libre party and that a re-writing of the constitution remains among his long-term goals.

Vasquez last month headed a team of negotiators that persuaded a local community to end its blockade of a major copper mine in southern Peru, resolving one of the biggest industrial crises to hit the country since Castillo took office.

Social conflict in Peru has frequently threatened the operations of some of the world's biggest copper, zinc and silver operations. Castillo, a former union leader, wants to replace bloody battles of the past with dialog, tailored solutions, a greater state presence to ensure compliance and prevent flareups, and by channeling more resources to areas of high conflict, Vasquez said.