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Peru's Fiscal Deficit Continues to Decline, Reaching 1.6% in May
🇵🇾 Paraguay /Economy & Trade

Peru's Fiscal Deficit Continues to Decline, Reaching 1.6% in May

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News From a news agency Context piece
  • Peru's fiscal deficit continued its downward trend, reaching 1.6% of GDP in May, driven by a 19.3% increase in tax revenues.
  • Tax income grew 11.6% from January to May, boosted by strong copper prices and corporate taxes.
  • The government aims to maintain fiscal prudence to respond to potential adverse shocks, such as climate events like El Niño.

Peru's fiscal deficit has continued its downward trajectory, reaching 1.6% of the Gross Domestic Product (GDP) in the twelve months leading up to May. This improvement is largely attributed to a significant 19.3% increase in tax revenues, which now stand at 19.3% of GDP.

it is important that the State maintains a prudent posture, which allows sustaining the downward trajectory observed in the fiscal deficit that, as of May 2026, stood at 1.6% of the annualized GDP.

— Rodolfo AcuñaMinister of Economy and Finance on Peru's fiscal performance.

From January to May, fiscal revenues saw an 11.6% increase. This growth was fueled by a robust economic performance and temporary positive factors, including high copper prices (up 10.7%), a 28.1% rise in corporate income tax, and a 12.1% increase in domestic general sales tax (IGV). The cumulative results also benefited from 2.3 billion soles (approximately $674 million) in profit transfers from public entities generated in 2025, a figure higher than the previous year due to differing registration dates.

it is essential to continue expanding the tax base and improving the efficiency of public spending.

— Rodolfo AcuñaMinister of Economy and Finance on fiscal sustainability measures.

Minister of Economy and Finance Rodolfo Acuña emphasized the importance of maintaining a prudent fiscal stance to sustain the deficit's declining trend. He highlighted the need to preserve fiscal space for responding to potential adverse shocks, particularly those related to natural phenomena like El Niño. Acuña stressed that expanding the tax base and improving public spending efficiency are crucial for ensuring the sustainability of public finances and funding social welfare policies in the medium and long term. He acknowledged that while recent fiscal performance has been favorable, factors continue to weaken the tax base and increase spending rigidities.

Although the recent evolution of public finances has been favored by the greater dynamism of economic activity and copper prices, factors persist that have weakened the tax revenue base and increased the rigidities of public spending.

— Rodolfo AcuñaMinister of Economy and Finance on challenges to Peru's fiscal health.
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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