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IMF: Peru's policies to face the pandemic are correct

15:15 | Lima, May. 29.

The International Monetary Fund (IMF) on Friday highlighted Peru's fiscal and financial strengths, as well as the country's response in order to tackle the crisis caused by the COVID-19 pandemic.

"Peru's policies to face the pandemic are the correct ones, aiming to prevent consequences that could last over time," IMF chief of mission for Peru Leo Bonato expressed.

"We hope that Peru will lay the foundations for a robust recovery in 2021," he noted in a virtual press conference.

Peru inspires confidence

International Monetary Fund (IMF) Western Hemisphere Director Alejandro Werner highlighted the confidence that Peru inspires among multilateral organizations such as the IMF.

"What has been done in Peru over the last 15 years fills us with confidence (…)," Werner emphasized.

Likewise, he underlined the efforts undertaken "over the last three months to face the pandemic, in addition to the reliability in the financial, fiscal and monetary management, and the way how society has faced economic shocks."

Therefore, Peru accessed low interest rates in the international market a few weeks ago in the last bond issuance.

Business recovery

Furthermore, the IMF officer considered it important to avoid the disappearance of productive capital due to liquidity problems that could later limit the economy's ability to recover.

In this regard, Werner highlighted the response of Peru and other countries in the region, which allocate a portion of support to the productive sector, in terms of tax and credit issues.

Peru does not have the problem of a scarce fiscal space like other nations in the region, but it has problems in terms of informality, he said.

In this sense, Werner stated that many countries are finding it difficult to reach out to some of the sectors —hit by the crisis— with economic support.

"In Peru and Latin America this problem is particularly important given the existing informality, but its solution requires structural reforms and increased productivity, and that will not be solved in the midst of a crisis," he added.

As is known, the IMF Executive Board on Thursday approved a two-year arrangement for Peru under the Flexible Credit Line (FCL) in an amount equivalent to SDR 8.007 billion (about US$11 billion, equivalent to 600% of quota).

(END) JJN/MVB

Published: 5/29/2020

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IMF: Peru's policies to face the pandemic are correct

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