LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

October 11, 2022

What Does Peru’s Budget Say About Castillo’s Priorities?

Peruvian President Pedro Castillo’s government in late August announced its budget proposal for the coming year. // File Photo: Peruvian Government.

Q

A

Cesar A. Martinelli, professor of economics at George Mason University: “The budget proposed by the Castillo government to Congress for 2023 puts emphasis on spending on education (which makes up 19.5 percent of the proposed budget), health (which accounts for 11.5 percent) and transportation (which is 9.5 percent of it). These are very similar percentages to last year. A big deal of this spending is nondiscretionary, so it doesn’t really reflect the priorities of one particular administration. There is some uptick in the resources destined to local and regional governments, as opposed to an upward trend until last year for a recentralization of public spending at the national level. Overall, there is an increase in the budget of nearly 9 percent versus official forecast of growth for next year of 3.5 percent. What animates the budget proposal is 1.) providing stability for the private sector to propitiate a recovery of investment, 2.) putting more faith in decentralization than previous governments, and 3.) putting forth an optimistic forecast regarding growth. With respect to these items, number one is…”

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