The international context and fiscal management drive the Peruvian economy and its favorable prospects for 2024, the
The MEF indicated that although Standard & Poor's (S&P) reduced Peru's rating from BBB to BBB- last April, the agency maintained its stable outlook for the South American country's economy.
Besides, Fitch maintained Peru's rating, and Moody's does not deem it necessary to adjust the rating.
Peru's economy remains one of the strongest in the region. Its strengths are reflected in a decreasing inflation rate that was already within the target range in April (2.42% during the past 12 months), as well as in fiscal deficit and public debt levels that are among the lowest of emerging economies in 2023 and for the coming years.
Similarly, the country risk stood at 160 basis points (bps), maintaining a decreasing trend since mid-2022.
For its part, the interest rate on 10-year Peruvian sovereign bonds decreased 16 basis points in April, remaining one of the lowest-borrowing costs in the region, only surpassed by Chile.
The economy
In April, the international context remained favorable for Peru.
Gold has reached 20-year highs, and copper is on a similar trend (US$2,286 per troy ounce and $4.52 per pound, respectively, on April 30).
This result has contributed positively to the enhancement of traditional exports, which registered a 9% growth in the first two months of 2024 compared to 2023. Besides, it is consistent with the 2.4% growth projection for said exports, which will also result in greater tax collection.
Central government tax revenues are already showing recovery signs. Last April, collection experienced an interannual 4% growth in real terms, reaching S/17.620 billion (US$4.702 billion).
This higher collection is explained by the extraordinary revenue obtained due
to actions by the National Superintendence of Tax Administration (Sunat) (which amounted to almost S/1 billion = US$267 million), as well as higher income from domestic and imported General Sales Tax associated with an improvement in economic activity and the increase in imports.
In turn, public investment recorded a significant increase in April 2024. The corresponding execution amounted to S/3.873 billion (US$1.034 billion), 7.2% higher than the execution in the same month last year, accumulating S/13.415 billion (US$3.580 billion) so far this year —the highest amount executed for the same period.
This result is associated with the articulated work by those entities subject to the National System of Multiannual Programming and Investment Management (SNPMGI) at the three government levels and the
Ministry of Economy and Finance (MEF).
At a disaggregated level, the National Government cumulatively executed S/5.802 billion (US$1.548 billion) between January and April 2024, exceeding by 8.2% the amount executed in the same period of 2023. This represents an advance of 20.6% of its Modified Institutional Budget (PIM) allocated for 2024.
For their part, regional governments executed S/3.274 billion (US$874 million), exceeding by 72.7% the amount recorded in the same period of 2023, which represents an advance of 21.8% of their PIM allocated for 2024.