Bloomberg News

Peru Boosts Fiscal Stimulus After Slowest Growth in Two Years

June 20, 2012

Peru’s government will boost investment in public works as part of a third round of economic stimulus to protect the Andean nation from slowing global growth, Finance Minister Miguel Castilla said.

Two thirds of the 2 billion-sol ($758 million) package will be spent on public works in progress and maintenance projects, Castilla said in an e-mailed statement today. The government will also extend a program of purchases from small businesses and a credit guarantee scheme for non-commodity exporters, he said.

The government is stepping up outlays after the economy expanded at the slowest pace in more than two years in April and exports fell 12 percent. Stimulus measures announced in September and October are worth close to two percentage points of gross domestic product, Castilla said March 21.

“The international environment remains very uncertain and we want to provide a fiscal stimulus in a preventive manner,” Castilla said. The government seeks to implement all the stimulus measures announced to date before the end of the year, he said.

The economy likely grew by more than 5 percent in May from a year earlier, after expanding 4.4 percent in April, Castilla said yesterday.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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