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Peru's reconstruction to reactivate public investment

Reconstrucción con cambios.

Reconstrucción con cambios.

11:55 | Lima, Aug. 27.

The Reconstruction With Changes program denotes a great opportunity to revive national and regional public investment, as it will mean boosting one percentage point of GDP in 2018, Peru's private-run Foreign Trade Society (Comex Peru) affirmed Sunday.

As is known, Peru was hit hard by Coastal El Niño phenomenon in the January-March period. The weather event was characterized by heavy rains, landslides and floods, which destroyed infrastructure and crops, leaving many citizens homeless. 

In this sense, Government-run Reconstruction with Changes' (RCC) budget will total S/23 billion (about US$7.25 billion).

The amount will be allocated for 5,000 projects in 13 regions over a period of 3 to 4 years. Likewise, it seeks to prevent future disasters. 75% of it will be for reconstruction works, 23% for prevention and 2% for improving the management of executing agencies.

Around 150,000 jobs will be created —especially in the north— and private consumption will also be boosted.

Comex Peru noted that public investment has been falling since 2014. It dropped 5.1% in the second quarter of 2017 (April-June) from the same period last year.
Contraction was mainly due to the reduction of capital executed by national (-12.8%) and regional governments (-12.6%).

"Therefore, reconstruction means a great opportunity to reactivate these spheres of the economy, and thus increase domestic spending, which will boost GDP growth by one percentage point in 2018," Comex Peru stressed.

(END) RGP/RGP/MVB

Published: 8/27/2017
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