Peru Unveils Stimulus Package for El Niño Risks, Eases Fiscal Rules to Allow $5.22 Billion in New Investment

Peru announced a package of economic measures to cushion a potential slowdown from the El Niño weather phenomenon, including liquidity support and tax payment deferrals for affected firms, Economy Minister Elmer Cuba said at a press conference on Thursday. President Keiko Fujimori said fiscal rules would be changed to allow an additional 18 billion soles ($5.22 billion) in investment next year. The change contemplates raising the deficit to 2.4% of GDP in 2027, up from the government's targets of 1.8% for this year and 1.4% for 2027. Peru's accumulated fiscal deficit in the 12 months through September stood at 0.9% of GDP, the lowest level in four years, according to preliminary central bank data. Cuba cited three external shocks threatening Peru's momentum: El Niño, higher oil prices and rising global interest rates. He said the economy could grow more than the previously forecast 3.4%, even accounting for El Niño, without providing a revised estimate.