MEF guarantees that the current economic model will be respected

The head of the Ministry of Economy and Finance (MEF), Pedro FranckeHe stressed this Tuesday that the Government of Pedro Castillo will maintain the guidelines of the current economic model, as well as unrestricted respect for property and private savings, contracts, legal security and private investment; However, he insisted on the application of a tax reform to reduce social gaps and address the health emergency.

“The tax reform of course is treading on some calluses (…) but the social gaps are too large and require these issues,” he explained at Moody’s Inside LatAm Peru event.

Thus, the official specified that this tax reform aims to expand tax collection, which accounts for around 20% of GDP, an amount far from the 27% of Latin America and almost half of 40% of the Organization for Economic Cooperation and Development (OECD).

Francke explained that the reform also aims to expand the collection base, which is why it will fight against tax evasion, which reaches 8% of Peruvian GDP; He added that it responds to the “significant” increase in public spending due to the health emergency and to the path of decreasing fiscal deficit that the Government has established for the next few years, the same one that expects to reach the goal of 3.7% of GDP in 2022 .

In this sense, the vice president of the Moody’s Investors Service group, Jaime Reusche, declared that “there is some room for optimism and that guarantees the stable outlook we have in the rating” (of Peru) after evaluating the first months of Castillo’s administration.

“What we must highlight in these first 120 days of government are the institutional locks that we did not believe would resist the onslaught of policies that were going to try to change the model. In a way, there is a relative moderation on the part of the authorities in this regard, ”he noted.