LIMA, Oct 22 (Reuters) – Peru on Thursday unveiled a package of economic measures aimed at cushioning a potential slowdown from the El Niño weather phenomenon.
Impacted firms will receive liquidity support and tax payment deferrals, Economy Minister Elmer Cuba said at a press conference, adding that Peru has the fiscal firepower to fund the measures.
• “Not all countries can do that – only solvent ones. The vast majority of the planet cannot respond like this,” Cuba said
• Cuba cited three external shocks that could threaten Peru’s economic momentum: El Niño, higher oil prices and rising global interest rates
• Peru’s accumulated fiscal deficit in the 12 months through September stood at 0.9% of gross domestic product, the lowest level in four years, helped by stronger tax revenue, including income tax collections, according to preliminary central bank data
• Cuba also said Peru’s economy could grow by more than the previously forecast 3.4%, even taking El Niño into account, though he did not give a revised estimate
• Scientist say that warmer ocean temperatures linked to the El Niño phenomenon are disrupting marine ecosystems off Peru’s Pacific coast, threatening the country’s fishing industry
• Speaking at the same press conference, President Keiko Fujimori said fiscal rules would be changed to allow an additional 18 billion soles ($5.22 billion) in investment next year
• Fujimori added that the change in fiscal rules contemplates raising the deficit to 2.4% of GDP in 2027, taking advantage of the public accounts’ solidity, from the actual government’s target of 1.8% for this year and 1.4% for 2027
($1 = 3.4471 soles)
(Reporting by Marco Aquino; Writing by Paolo Laudani; Editing by Kylie Madry and Nick Zieminski)
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