Peru president upbeat on economy, plans to call elections by April

By Marco Aquino

LIMA (Reuters) -Peru's President Dina Boluarte was upbeat about the country's economy in an independence day speech to Congress, predicting higher-than-expected economic growth and saying she would formally call elections planned for 2026 by next April.

Boluarte, who faces accusations of corruption and abuse of power, took office late 2022 after the ouster and arrest of predecessor Pedro Castillo who tried to dissolve Congress, but protests in the first few months of her administration left at least 50 people dead and slowed the key mining sector.

The economy contracted some 0.6% last year, hit by extreme weather fueled by the El Nino weather phenomenon and lower private investment, but this year Boluarte predicted it will surge above the 3.1% predicted by the country's central bank.

"This solid performance reflects the resilience of the Peruvian economy. We committed to recovering our growth capacity and we are on that path," Boluarte told Congress.

Boluarte's government has spent millions of dollars to boost mining after investment in the sector fell 10% last year.

She also announced plans to allocate 17 infrastructure projects worth $3.2 billion in the rest of 2024, along with plans to create a new infrastructure ministry to boost investment.

'IDEOLOGICAL SECTORS'

Boluarte also spoke of the recent relaunch of development of Grupo Mexico's Tia Maria copper mine after the project was paused for over a decade as communities protested environmental impacts. Protests left six people dead between 2011 and 2015.

"The project has a vital importance in restimulating mining investment," Boluarte said. "Tia Maria is not a project we are imposing. That is a false narrative by ideological sectors that refuse to admit that mining strengthens our economic growth."

Grupo Mexico said this week it would revise its planned $1.4 billion investment by the end of the year.

Peruvian prosecutors accused Boluarte in May of bribery and illicit enrichment involving Rolex watches, and she is also being investigated over the deaths in the protests as she took office.

Boluarte, 62, denies the accusations and maintains security forces responded proportionally to violence from protesters who opposed Castillo's ouster.

Boluarte, Castillo's former vice-president who was sworn in hours after his arrest, said she would call general elections next April as required by the constitution.

"Our duty as a government will be to ensure order, peace and freedom in this fundamental process," she said.

In May, newspaper La Republica reported that Boluarte hit her lowest-ever approval ratings at 5%, while the right-wing dominated Congress - which supports Boluarte - had an approval rate of just 6%.

Peru's left has long called for Boluarte to step down. Peru has had six presidents since 2018.

(Reporting by Marco Aquino; Writing by Sarah Morland; Editing by Leslie Adler and Richard Chang)