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Peru Economy Minister Urges Caution on Fiscal Spending Approved by Congress
🇵🇾 Paraguay /Economy & Trade

Peru Economy Minister Urges Caution on Fiscal Spending Approved by Congress

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

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  • Peru's Economy Minister Rodolfo Acuña urged Congress to be cautious about approved fiscal spending, warning it could strain public finances.
  • Acuña highlighted demands for increased pensions for teachers and payments for temporary public workers, which he stated the government cannot afford without "gradual" execution.
  • The minister also noted the government is prioritizing urgent needs like El Niño preparedness, allocating funds and seeking additional credit for disaster response.

Peru's Minister of Economy and Finance, Rodolfo Acuña, has called for greater caution from Congress regarding recently approved fiscal spending laws. He warned that these laws, which amount to nearly 3% of the country's GDP, could prove unsustainable if not implemented gradually, stating, "there is no fiscal box that can support it."

Congress must be more cautious.

— Rodolfo AcuñaPeru's Minister of Economy and Finance, Rodolfo Acuña, urges caution on fiscal spending laws approved by Congress.

Acuña addressed journalists after appearing before the Budget Commission in Parliament. He noted that legislators are pressuring the executive branch to approve increased pensions for teachers, a measure that would cost 10 billion soles (approximately $3 billion USD). Additionally, there are demands for payments of bonuses and service compensation for temporary public workers under the CAS category, totaling 3.5 billion soles ($1 billion USD).

"Where do we get that money from?" Acuña questioned, indicating that these payments pose a significant challenge for the government. He emphasized that the interim government, led by José María Balcázar until July 28, is focused on urgent matters such as preparing for the El Niño phenomenon. A budget of 300 million soles ($88 million USD) has been allocated for this, with the possibility of further resources being directed as needed, as the effects of El Niño, including intense rains and floods, are expected to persist into early 2027.

there is no fiscal box that can support it.

— Rodolfo AcuñaRodolfo Acuña warns about the sustainability of approved fiscal spending if not executed gradually.

The Ministry of Economy recently announced it is arranging a contingent credit of $500 million USD to bolster the response to natural disasters and the impacts of El Niño. Meanwhile, Alejandro Soto, president of the Congressional Budget Commission, mentioned that the Ministry of Economy has proposed a supplementary credit of 4.16 billion soles ($1.2 billion USD) from tax revenues to cover El Niño-related expenses and the bonuses for CAS workers. Soto added that the executive branch has over 8 billion soles ($2.3 billion USD) available for contingencies, and a law passed by Parliament mandates the full payment of bonuses for these public sector workers.

Where do we get that money from?

— Rodolfo AcuñaRodolfo Acuña questions the funding source for increased teacher pensions and public worker payments.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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