Finance Minister Elmer Cuba laid out a plan on Thursday to loosen Peru's fiscal rulebook and create more headroom. Under the plan, the shortfall could rise to 2.4% of GDP next year, up from the previous 1.4% ceiling, and would then be steered back to about 1% before the administration concludes.
That leeway would allow up to 18 billion soles, or $5.2 billion, in additional spending in 2027. At the same press conference, President Keiko Fujimori detailed the mix: 13 billion soles directed to infrastructure, 2.5 billion soles in cash payments for vulnerable households, and 500 million soles for fuel subsidies.
Officials pitched the shift as a buffer against a strong El Niño, pricier fuel globally, and tighter financing conditions abroad, in order to keep Peru's business backdrop resilient. Cuba said the package is built so growth in 2027 tops 2026 despite those headwinds.
Congress still has to sign off. The government also plans to aid affected firms by unlocking balances at Banco de la Nación and widening credit guarantees for small businesses. Cuba pointed to fishing as one industry that could see relief.
The Fiscal Council has warned of mounting fiscal risks stemming from laws passed by the prior Congress that would lift pensions for the military and police and grant new labor benefits to some temporary workers.
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Peru has been a relative macro outlier in the region, featuring public debt that is low and a currency that is strong, and it regained its deficit target in 2025 after a three year stretch without hitting it, helped by record mining prices. By September, the rolling 12-month deficit had eased to 0.9% of GDP as elevated commodity prices lifted tax revenues. Meanwhile, officials say domestic confidence is strong and country risk sits below recent years' levels, context that frames how markets may price Peru exposure.
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