Peru finance minister says ‘vigorous’ rebound caps need for fiscal splurge By Reuters

© Reuters. FILE PHOTO: Houses are seen behind a construction site, in Lima, Peru September 27, 2018. REUTERS/Guadalupe Pardo

By Marco Aquino

LIMA (Reuters) – Peru’s mining-driven economy is set for a “vigorous” rebound this year that should limit the need for the incoming government set to take office on July 28 to open the fiscal spending taps, current Economy Minister Waldo Mendoza said on Monday.

Peru’s economy will expand by at least 10% this year and 5% the next due to fiscal injections already made, while benefiting from high global prices of commodities including , the country’s most important export, Mendoza said.

The Andean country, the world’s no. 2 copper producer behind Chile, is waiting for socialist Pedro Castillo to be formally confirmed the next president after he narrowly edged out a conservative rival in a June 6 election. He has pledged to hike taxes on mining and increase spending on healthcare and education.

“We can grow 10%, 11% and maybe 12% this year without any additional fiscal boost thanks to the recovery of companies that have been supported by large programs of credit, funded with a state guarantee,” Mendoza said at a press conference.

In comments aimed at the likely new leftist government Mendoza said tax hikes should be made cautiously to avoid impacting the competitiveness of the economy and said his team intended to share proposals with the incoming administration.

Castillo, a teacher and son of peasant farmers, has rattled the Andean country’s political and business elite with proposals to shake up mining laws and the constitution, though he has of late looked to win over investors with more market-friendly rhetoric.

“The temptation to spend more, get into debt, is a temptation that we should not fall into,” said Mendoza. “Macroeconomic stability is necessary, let’s not underestimate it.”

Mendoza said that the current government will leave “very solid” public accounts, with international reserves at 36.7% of gross domestic product (GDP) and public debt at 34% of GDP, strong levels compared to neighboring countries in the region.

“The external context is terrific,” he said. “It is an additional boost for the recovery, which is coming along well and is very vigorous.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button