Peru: Growth, Gov't programs to reduce poverty in 2017

Productores de papas nativas.

Productores de papas nativas.

13:40 | Lima, Aug. 1.

The economic growth forecast for 2017 and the Peruvian Government's extraordinary subsidies to face the aftermath of Coastal El Niño disasters will contribute to poverty reduction this year, French organization Institute of Research for Development (IRD) projected.

As is known, Peruvian President Pedro Pablo Kuczynski announced S/200 (about US$61.69) allowances to benefit 358,000 affected families and 250,000 elderly citizens, as part of his Address to the Nation on July 28. 

IRD Director Javier Herrera highlighted the redistributive impact of said subsidies, which help mitigate falling income caused by Coastal El Niño floods and landslides in January-March 2017.

Such view was echoed by Lima Chamber of Commerce's (CCL) Institute of Economics and Business Development (IEDEP). 

"Economic growth is the most critical factor to reduce poverty, and with President Kuczynski's GDP growth forecast over 4% as of 2018, cutting poverty to 15% by 2021 is feasible," CCL-IEDEP Director Cesar Peñaranda told Andina news agency.  

Thus, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) weeks ago underlined Peru's enviable position in the region in terms of reducing poverty.

International news broadcaster CNN has also praised the Inca country's efforts to tackle poverty, which led to a 34% reduction in the 2001-2016 period (down from 54.7% to 20.7%). 

Economic reactivation  

On a different note, the IRD head observed a 2.8% GDP growth rate for this year —as forecast by the Economy and Finance Ministry— may moderately contribute to reducing poverty, hence the government reactivation plan's "pivotal role."

"Much will depend on the execution speed of public investment projects, which are basically infrastructure ones like highways and housing: two highly labor-intensive fields with an impact on GDP growth," he stated.
Lastly, Herrera noted that, while the population saw a drop in income in the first half of the year, the second semester will likely see a considerable "rebound" in real terms. 


Published: 8/1/2017