00:00In Peru, the Ministry of Economy's continued failure to comply with the fiscal rules could
00:05affect the country's fiscal credibility. Our correspondent Ramiro Angulo tells us more.
00:11The announcement made by the Ministry of Economy to modify the fiscal deficit rule from 2.2% to
00:192.8% of gross domestic product has generated concern because it reveals poor management of
00:25public finances. It is one thing when expenses increase because investments are being made,
00:37services are being expanded, and the state's coverage is being expanded. But unfortunately,
00:41much of the expenditure that has been incurred in recent times is expenditure that is basically
00:45the result of political clandestine. The country has now been in violation of the fiscal deficit
00:55rule for two years in a row, a fact that, according to experts, could erode financial
00:59credibility and lead to higher interest rates on debt. If your expenses start to skyrocket and your
01:11income is not growing, has stagnated, or, as is happening in some cases, is starting to decline,
01:16what is happening? You start to go into debt, and sooner or later you will have to pay that debt.
01:20So the financial sustainability of the Peruvian state is being mortgaged by a Congress that is
01:25already leaving. For experts, this mismanagement is the responsibility of a Ministry of Economy
01:35subordinate to Congress, which among other controversial initiatives, intends to grant
01:42tax benefits of nearly $5 billion to agricultural exporters. There is a position in Congress that is
01:54not only committed to favoring powerful economic groups, such as large transnational corporations
02:03or powerful economic groups in the agricultural export sector and other sectors, but there are
02:08also congressmen who, as you know, are involved in corrupt acts. And they even cut the salaries of
02:18their workers. And there is also a Congress that we all know has a 5% approval rating and a government
02:23that has a 0% approval rating, so all of this is harmful to workers and the Peruvian people.
02:31For economist and former minister of labor Fernando Codros, this scenario is worrying due to low tax
02:41pressure and the various risks that poor management of public finances can generate.
02:45The main risk, as I mentioned, is that not enough will be collected to be able to provide quality
02:56services, which will increase the fiscal deficit. That this leads us to use the fiscal savings that
03:07should be reserved for extraordinary situations, and if those fiscal savings are exhausted, we end up
03:11incurring more debt as a country, with a higher public debt burden, and we lose credibility and the trust of
03:22international economic agents and that investment in the country is reduced.
03:26Experts believe that this situation will lead to less resources being allocated to key sectors
03:38such as education and public health affecting the most vulnerable.
03:41Afectando a los más vulnerables. Desde Lima, para Telesur, Ramiro Angulo Maquiavelo.
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