WBG highlights proper monetary, fiscal policy management in Peru

Banco Mundial. AFP

16:55 | Lima, Oct. 11.

The World Bank Group (WBG) notes wise management of monetary and fiscal policy in Peru and ruled out the possibility of a fiscal adjustment-led concern at a time when Latin America and the Caribbean start to recover, after six years of slowdown.

World Bank Chief Economist for Latin America and the Caribbean Carlos Vegh presented the organization's latest semiannual report, "Between a Rock and a Hard Place: The Monetary Policy Dilemma in Latin America and the Caribbean."

In such document, he explores the potential of monetary policy to support growth without risking hard-won gains in the battle against inflation.

"In the case of Peru, overall, the country has made a good work. Peru has been one of the countries that's kind of followed the Brazilian example, raising its (reference) interest rate and bringing it down later," Vegh said regarding the monetary policy.

The Central Reserve Bank (BCR) lifted its reference rate to 4.25% in 2016, and gradually decreased it to 3.5% in September this year in order to stimulate the country's economy.

The World Bank chief economist ruled out any concern over the recent increase in the fiscal deficit to meet major expenses in infrastructure following Coastal El Niño phenomenon.

(END) MDV/RMB

Published: 10/11/2017

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