LIMA, Aug 14 (Reuters) – Peru has again set caps on public spending and debt after being lifted during the pandemic, the economy ministry said in a notice published in the country’s official gazette on Saturday.
As of 2022, Peru’s deficit will not exceed 3.7% of GDP, while national debt will not exceed 38% of GDP, the ministry said.
The move is one of the first major economic decisions under left-wing President Pedro Castillo, who won the presidency this year on a far-left platform that scared the markets but who said he would run the economy responsibly.
Castillo’s economics minister, the moderate left economist Pedro Francke, announced the reintroduction of the fiscal ceilings in an interview with Reuters earlier this week.
“It is important to restore the fiscal rules as a sign that the country will regain its financial strength in the next few years,” said Francke on Saturday in a Twitter post.
Peru has been one of the most stable economies in Latin America for the past three decades, although that perception has weakened in recent years due to political unrest. Castillo is Peru’s fifth president in five years. (Reporting by Marcelo Rochabrun in Lima editing by Matthew Lewis)