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Kurt Burneo: “We need to harmonize monetary policy with fiscal policy”

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The new Minister of Economy and Finance, Kurt Burneowas consulted on a local radio regarding to the measures that he considers should be taken to revitalize the economy, especially for the recovery of employment.

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As former director of Central Reserve Bank (BCRP)Burneo pointed out that the monetary policies assumed by this entity, such as the increase in interest rates, slow down efforts to reactivate the economy.

“The economy is slowing down, at that point I think we should have a conversation with the BCRP, because what it is doing is raising the interest rate month after month, which is signifying the decrease in credit and, therefore, slows down consumption and investment,” he pointed out.

He affirmed that, although it is true that the entity seeks to lead inflation to return to the range between 3% and 1% in the second half of next year, it is necessary to generate harmony between monetary and fiscal policy.

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“We need to sit down with the BCRP to harmonize the monetary policy of the entity with the fiscal policy of the Ministry of Economy and Finance (MEF)”, he said.

Likewise, he added, with respect to the recovery of employment, that it is necessary to boost public investment, since the demand for employment depends on the need for production.

“With charge to review the numbers, because only on Monday I will sit in the ministry. If one identifies the problems so that public investment can pick up, which is not a matter of lack of resources, the issue is related to management. Both at the national government level and subnational governments,” said the official.

Seeks to generate a “quality shock” to public management

The minister was also consulted on how he will achieve the “quality shock” in public management, if reality shows that there is volatility in the appointment of ministers and a worsening of the quality of management in most portfolios.

“What it is about is starting to correct, we will present the directions and the perspective of where the economy is going to make decisions. The goal is to regain confidence, especially in the private sector, ”he specified.

Finally, he pointed out that there needs to be an adequate fiscal balance, a fiscal rule that is complied with, which was set aside by the pandemic (due to the need for greater spending) and, in this context, “there is no room for ideology, it is pragmatism.” pure”.

Source: Larepublica

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