| 11 December 2023, Monday |

Peru launches $1.6 bln economic recovery plan after protests

The economy of Peru has been negatively hit by weeks of protests that have followed the removal of former President Pedro Castillo. On Thursday, the finance minister of Peru unveiled a $1.55 billion plan to resuscitate the economy.

According to Alex Contreras, the 5.9 billion single package, which will be paid for with additional tax revenue and money left over from the 2022 budget, would focus on the areas most hit by instability and blockages.

According to him, it will generate 130,000 new employments over the following 12 months and contribute to the economy growing by 3% in the following quarter.

Measures rolled out over the next six months include expanding welfare provisions like pensions, soup kitchens and access to natural gas in homes as well as public works, and investments in mining and agriculture, Contreras said.

At least 22 people have died during the protests, which have also crippled trade activity. They came to a head after Castillo was removed from office and arrested as he tried to illegally dissolve Congress.

His former vice president, Dina Boluarte, took his place and declared a state of emergency, giving security forces special powers and limiting freedoms such as the right of assembly.

Contreras, who was appointed by Boluarte, said the protests by Castillo supporters and those unhappy with her government had caused the country to lose around 100 million soles a day, plus infrastructure damage.

Total losses come to 1 billion soles, or 1% of Peru’s December GDP, a ministry presentation showed.

The second-largest producer of copper in the world is Peru, but even before Castillo’s departure, the business was already seeing demonstrations and road blockades from local residents.

According to Contreras, the proposal will allow the Andean country to maintain its 3.1% to 3.9% growth forecast for 2023.

Contreras told Reuters this month that the nation would maintain its “non-negotiable” fiscal deficit targets.

  • Reuters