stated that Peru's fiscal strength is driven by the country's "exceptional" mineral prices and warned that rising current spending is becoming a threat to the future.
He made the statement on Universidad del Pacifico's Modo UP podcast in a conversation with Juan Francisco Castro, dean of the Faculty of Economics and Finance at the university and a former student of Velarde.
The BCR head said Congress has paid less attention to what the Ministry of Economy and Finance (MEF) had been saying and to the sharp rise in current spending, although the country still retains several economic strengths.
"There is greater fiscal strength because we are benefiting from exceptional prices, the best since 1951, but current spending has risen," he pointed out.
The expert indicated that the fiscal rule was changed in 2006 to control the pace of growth in current spending, while public investment could continue to grow.
He explained that although current spending has grown, the fiscal deficit has not increased as much for two reasons: first, tax revenues have risen due to favorable commodity prices; and second, public investment has fallen.
"Current spending has eaten into the space for public investment," Velarde emphasized.
In that regard, the BCR official warned that Peru's macroeconomic strengths have weakened, but that this situation has been masked by the recovery in fiscal revenues recorded in recent months.
"I do believe the monetary side is strong, but a weak fiscal position is a threat. It is not an imminent threat; I do not think it will materialize even in the coming years, but it weakens us over time," he explained.
Velarde also noted that one of the measures to keep inflation low in Peru is that the BCR no longer lends money to the public sector or the Government.
The BCR recently projected that Peruvian exports would reach a historic record of US$118.171 billion by the end of 2026, above the US$90.082 billion recorded in 2025, largely due to higher prices for the minerals the country exports.
(END) MDV/MVB