The finance minister, Miguel Castilla, has revealed that the Peru budget 2012 has allotted a fiscal stimulus package of 184 million dollars. The budget has been approved by the Parliament after a debate that lasted 6 hours. It received 51 votes in its favor.
Peru Budget 2012 Highlights:
The stimulus plan of the 2012 Peru budget states that regional and local governments will be able to carry forward their savings from the 2011 fiscal.
This will be applicable for ministries like health and education as well.
Castilla has revealed that this financial stimulus plan will amount to 1.8-2 percent of Peru s GDP in 2012.
The finance minister of Peru has stated that the government will be spending as per economic requirements. He has further stated that in 2011 Peru will see an economic growth rate of 6.2 percent.
The total sum allocated for spending in the 2012 budget is approximately 95.53 billion soles.
In 2011 the aggregate allotment was 88.46 billion soles.
The 2012 budget will give top priority to social inclusion by allocating resources to various public agencies.
These organizations have been created to head programs that deal with the high levels of malnutrition and poverty apart from absence of proper educational and health services.
The budgetary allocation for 2012 is 8 percent more than that of 2011. It focuses on critical areas like public safety and human capital.
Castilla has stated that the national administration did not increase the budget anymore as it was unsure whether tax revenues will grow at a rate similar to the previous years.
The 2012 budget gives new dimensions to social inclusion by accounting for sectors that had not been covered before. The sector for disabled people will receive an independent allotment while the most economically backward municipalities will be given special attention.
The 2012 budget will also help regions maintain their present levels of income and make the agricultural sector aware of resources they previously did not know about.
Peru Budget 2012 – Expert Analysis:
According to economic experts the Peru budget 2012 represents the continuation of a positive economic policy. But Moody s Investors Service has stated that the Andean country still faces some critical institutional problems that could affect its economic growth and performance in the long run.
A recently published Moody s report on the 2012 budget states that it is both conventional and credit-positive and has sufficient financial room for a stimulus package to be implemented in that period.
The left oriented 49 year old President of Peru, Ollanta Humala, who has also served in the national army, took charge in July. He had promised that he will apply social programs that deal with poverty reduction and maintain overall economic growth.
Moody s states that, initially there were worries over budgetary deficit due to the economic policies of the new government but Peru is now in a position to see a surplus of 1 percent of the GDP in the upcoming fiscal.
It has pointed out, though, that Peru could face economic problems due to the corruption scandals featuring several of its top public sector officers. It has also said that the social issues at the mining sector could put off investors and create political problems later on.