LIMA
President Ollanta Humala will ask Congress to approve approximately $550 million (1.6 billion soles) in public spending and simplify environmental permits Thursday, Finance Minister Alonso Segura told local media.
The new funds are in support of a new plan launched Wednesday for an economic reform package to rouse lethargic growth.
The country’s mineral-exporting economy grew at its slowest pace since 2009 in the second quarter, as copper and gold exports fell and private investment dried up.
The plan proposes year-end bonuses for 1.7 million state workers and expanded budgets for social programs and education.
“These actions will help to spur the economy and emphasize above all that it’s continuing to work to improve competitiveness and productivity,” Segura said in a televised interview with Canal N, a 24-hour cable news channel.
The government hopes to merge different environmental permits and cut waiting times on impact studies.
That would reduce bureaucracy that has been criticized by Peru’s business community, and rouse investment for its $57 billion portfolio of mining projects planned over the next few years.
But critics say the country is stripping important environmental safeguards in the pursuit of growth.
In South America’s best performing economy last decade, growing above 6 percent, falling mineral exports have seen numerous downward revisions in growth this year.
And the latest export figures show the third biggest decline this year, falling 15 percent in September on a year earlier.
The new proposals are the fourth round of emergency measures this year.
“They’re taking important actions to give impulse to an economy that continues to cool,” said Luis Ordoñez, head of equity research at Inteligo SAB, a Lima-based brokerage firm.
But recovery would be more gradual than expected, as Congress has not yet fully passed a third package that was sent in July, threatening the fourth, Ordoñez added.
“If Congress was more in tune with the government we would see the effects of these stimulus measures earlier than next year.”
Segura said growth is returning after registering just 0.3 percent in June.
The central bank has halved initial estimates to 3 percent this year, expecting about 5 percent in 2015. Spanish bank, BBVA predicts 2.6 percent for 2014.
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