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World Bank: Peru has a very limited system to reduce poverty

World Bank: Peru has a very limited system to reduce poverty

In fiscal matters, taxes and direct transfers, reforms still need to be carried out, since we are at a disadvantage compared to other countries in the region.

Although Peru still has macroeconomic strengths to remain stable despite the risk of global recession —in the face of inflation and the tightening of monetary policies in large markets— and internal shocks, such as social unrest during the Dina Boluarte regime, it has a huge challenge for closing gaps in its population, they warn from the world Bank.

“We see that Peru has a fiscal system, of transfers (to the population) and taxes with very little impact to generate redistribution, and therefore have an effect on poverty reduction. It is a very limited impact for households “Daniel Barco, senior World Bank economist for Peru, told La República.

The specialist recalled that our country has a tax system that is based on indirect taxes “that are more regressive”, apart from having a general tax collection that puts us at a disadvantage compared to other Latin American countries.

Barco recommends applying a comprehensive analysis before undertaking the tax reforms that the government deems appropriate, since the main problem in Peru is tax and tax evasion, as well as the prevailing informality, which hinders opportunities for companies to grow.

For his part, Carlos Arteta, lead economist at the World Bank, announced that The 2.6% projected for Peruvian GDP growth this year could be reduced if political volatility continues.

“Peru is associated with a typology of emerging country, exporter of raw materials and metals subject to multiple negative shocks (…) We recommend maintaining fiscal prudence and ensuring that support is highly focused on the most vulnerable households, prioritizing spending “, he added.

Source: Larepublica

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