The households expected to receive the S/350 (about US$85.7) government grant will rely on additional income, which would stimulate domestic consumption nationwide, Miguel Jaramillo —a specialist on social policies and principal researcher at Grade— forecast on Tuesday.
"Consumption is the main effect that can be expected from this grant. People will rely on an additional income, and that should stimulate consumption," the economist told Andina news agency.
"A grant worth S/350 will be delivered to each one of nearly 13 million people. The subsidy will be for each individual and not for family, since it was not effective to hand over the same amount to one household composed of three members if compared to another of eight people," Bellido indicated.
Nonetheless, Jaramillo explained that the characteristics of the grant are not very precise yet.
Fiscal cost
In this sense, it is necessary to assess how the rest of the expense will be handled in order to prove that accounts remain balanced.
It will total about S/4.5 billion (about US$1.10 billion), which implies reaching out to 13 million people with this grant, while the fiscal deficit stands at 5% of GDP, he indicated.