on Monday highlighted the declining trend Peru's fiscal deficit has been showing throughout 2026.
In this regard, it reported that the annualized fiscal deficit indicator as of July this year reached 1% of Gross Domestic Product (GDP), reaffirming its continued decline: 2.1% of annualized GDP in the first quarter, 1.3% in the second quarter, and 1% as of July.
The MEF noted that the fiscal deficit's performance is mainly driven by strong tax revenue collection.
According to figures from the Central Reserve Bank (BCR), general government current revenue grew 13.7% in real terms between January and July 2026.
According to the MEF, this result was associated with strong economic activity and high export prices, as well as profit transfers from public entities to the Public Treasury.
In particular, it highlighted revenue from Third-Category Income Tax (industrial and commercial activities), which increased 31.7% in real terms, and domestic Sales Tax revenue, which grew 10.6% in real terms, reflecting strong business activity and consumption.
Meanwhile, the Government's non-financial expenditure increased 4.3% in real terms between January and July, mainly due to higher current expenditure obligations (8.2% in real terms).
This reflects the growing rigidity of the public budget resulting from various spending initiatives approved in recent years.
MMM due by month-end
Minister Elmer Cuba reported that details of this issue will be presented in the Multiannual Macroeconomic Framework (MMM).
It will be published before the end of August and will include the country's economic and fiscal forecasts for the 2026-2030 period.
"This scenario of greater spending rigidity could lead to fiscal imbalances that, if no action is taken, would worsen in the coming years," he indicated.
Three lines of action
The Cabinet member explained that the MEF is considering three lines of action to strengthen the country's fiscal policy.
First, he stated, this involves converging toward a credible and sustainable fiscal path, gradually adjusting its parameters without compromising the country's solvency.
Second, efforts will be made to achieve greater efficiency in public spending, with emphasis on improving the quality of public investment and procurement, as well as reducing spending rigidity.
Third, the aim will be to reduce tax evasion and avoidance, along with strengthening the tax administration.
Preserving investment grade
The minister expressed the Government's commitment to ensuring that the sustainability of public finances becomes one of the country's main macroeconomic strengths.
In this regard, he explained that sound fiscal management will enable households and businesses to maintain access to financing on favorable terms, preserve the country's investment grade, and allow the State to respond more effectively to external shocks and natural disasters, such as El Niño (FEN), without neglecting the promotion of productive investment, economic growth, and employment.