Economy & Business - January 2022

PERU: Playing it safe with the 2022 budget

Peru’s congress approved the national budget for 2022 on 25 November, following three days of debate. Prime Minister Mirtha Vásquez described the budget, totalling PEN197bn (US$49.88bn), as the result of a consensus between the executive branch and the legislature – relations between which have been fractious in the first five months of President Pedro Castillo’s left-wing administration. The budget is the first solid indication of the priorities of Castillo, the former schoolteacher and union leader elected in July. The two key areas receiving increased funding are education and healthcare, with a combined sum of PEN57.7bn. Other areas of high spending include agriculture, poverty alleviation, and the promotion of employment and productivity, with the latter being portrayed as Peru’s route out of the economic slowdown caused by the coronavirus (Covid-19) pandemic. Indeed, Vásquez stated that Peru is likely to lead the region in terms of growth in 2022, with the budget being based on these macroeconomic expectations.

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