Exclusive: Peru's new government is looking at economic stimulus measures for regions being roiled by protests after the ouster of leftist leader Pedro Castillo, but will hold steady to ‘non-negotiable’ fiscal deficit targets
The political turmoil is increasingly threatening to derail Peru's economic stability, with ratings agencies warning of downgrades, blockades impacting major mines and protesters demanding Congress and new president Dina Boluarte step down.
Amid warnings from ratings agencies about the economic impact of the unrest and possible elevated spending, Contreras pledged that fiscal responsibility would be maintained. Peru is aiming for a fiscal deficit of 2.5% of GDP this year and 2.4% next year. The 2022 growth outlook was cut last month to between 2.7% and 3%, below the 3.3% previously forecast.
"The impact of the protests is limited, we believe that they will moderate in the following days," he said, adding the unrest would not force the government to change its outlook for 2023.Boluarte, formerly vice president, has pledged to bring forward the next general elections by two years to 2024, though that has failed to bring an end to protests.from stable and warned about a possible ratings downgrade if the upheaval continued.
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