ECONOMY-PERU/ – REUTERS Agency
LIMA, Oct 21 (Reuters) – The Peruvian Congress approved a fiscal stimulus requested by the Government to finance greater expenses related to the emergency caused by the El Niño climate phenomenon and the economic reactivation of the country, which is going through a recession.
The fiscal stimulus, approved on Friday night as a supplementary credit to the public budget, amounts to approximately 1,581 million soles (about 410 million dollars), according to the project that obtained the green light in Congress.
Economy Minister Alex Contreras acknowledged for the first time earlier on Friday that the country is “without a doubt” in a recession and said fiscal stimulus is key to reviving the country’s economy.
“We are deploying teams to accelerate the execution of public investment (…) we have fiscal space to support the reactivation,” Contreras said in a message from the Ministry of Economy on X, formerly known as Twitter.
The Peruvian economy entered a technical recession in the second quarter of the year and in August productive activity fell 0.63% year-on-year, its fourth consecutive monthly decline due to the adverse effects of El Niño, lower private investment and delays in social conflicts.
The central bank and the government cut their expansion projection by around 1% for this year; But analysts consider it to be too optimistic and some even foresee a negative result at the end of 2023, which would mark Peru’s worst performance in a quarter of a century without considering the pandemic.
(Reporting by Marco Aquino, editing by Marion Giraldo)
Source: Ambito
