Andina

Peru: MEF plans to present public sector austerity regulation

Photo: Courtesy

Photo: Courtesy

12:31 | Lima, Feb. 20.

Peruvian Economy and Finance Minister Jose Arista indicated that he plans to present an austerity regulation for the public sector in the coming months, so that spending is carried out rationally.

The Cabinet member said that, according to the rule, Peru should register a 2% fiscal deficit this year.

"We project, and in fact, that will be our effort: to reach 2%. Currently, it is said that the fiscal deficit might be 2.8%, in some cases 2.6%, and there are some estimates of 2.9%," Arista explained.

"That obliges us, for example, to intend to be very reasonable with the level of spending and, above all, so as not to affect the population with the quality of spending," he added. 

The minister stated that "for this reason, I am thinking about launching, in the coming months, with the authorization of the Cabinet Chief (Alberto Otarola) and the President (Dina Boluarte), an austerity regulation for the public sector."

In that sense, he said the rule of rationality in public sector spending would be aimed at reducing the purchase of vehicles, except for the Health, Education, Interior, and Defense sectors.

"Better control of gasoline spending, better control of consultancies; we must review that well," he emphasized in remarks to RPP on Monday night.

On the other hand, Arista indicated that Congress sets a bad example in public spending management.
 
"It is a bad example when we try to reduce spending, but on the other hand we have a Congress, with the power and freedom that the Constitution grants it, which allocates bonuses well above the public sector (level)," he explained.

Minister Arista pointed out that given Parliament initiatives regarding increasing public spending, one of the means could be the vetoing of related bills (to be exercised) by President Boluarte.

Fiscal Pact

"But more important than that is to also talk with Congress authorities so as to have a kind of fiscal pact, in which we cease to create spending rights; on the Executive Branch side, that also gives us the power and sufficient space to maintain fiscal stability," the minister explained.

In this regard, the government official indicated that it is a about establishing fiscal pact for Peru.

"In the end, our ideological differences have one point in common, which is the country's economic growth, because the only way to provide well-being to the population is by growing, attracting investment," Arista stated.

"Investors go (to a country) if they see a stable economy; they don't go to economies in which the fiscal framework is being changed, expenses are being generated, perforations to the tax system are being carried out, and that generates a plenty of noise in the system," he noted.

Investments

Minister Arista commented that now that the Port of Chancay is close to being inaugurated, efforts must also be undertaken on the generation of a logistical road ring that enables Peru to reap benefits to the maximum.

"Peru has enormous advantages; we have Chavimochic (Irrigation Project) in the north, and Majes (Special Project) in the south," he underlined.

(END) MDV/MVB

Publicado: 20/2/2024