Natural disasters will be attacked with S/6,000 million

Congress has until November 30 to approve the Public Budget for fiscal year 2024, and before starting the debate in plenary, the ministers of Dina Boluarte’s administration presented their margins of action for a year that would be marked, once again, by the phenomenon of The boy.

In total, the Initial Opening Budget (PIA) for the next fiscal period is S/241,000 million, 12% more than what was established in the 2023 PIA (S/215,000 million); and although the largest amount of resources are allocated to areas such as education, transportation, health and public order, decisions will be articulated from various fronts with a cushion of just over S/6,000 million to prevent and address the havoc generated by natural disasters. , considering the recent experiences of El Niño Costero, Cyclone Yaku or droughts.

And, after a 2023 marked by recession, the El Niño phenomenon – which would hit the country in the summer of 2024 – may limit the statistical rebound that usually happens after a year where the GDP closes below 0%, as Some specialists and banking entities are waiting.

Another of the most tangible impacts on households would be the rise in inflation, if El Niño is strong, since supply roads and the planting and harvesting of agricultural products would be interrupted. It should be emphasized that the Central Reserve Bank estimates that in April 2024 inflation will return to the target range – from 1% to 3% – as long as the FEN is moderate; Otherwise, there would be high prices.

Alex Contreras, Minister of Economy and Finance, adds that social conflicts are added to these shocks, to the point that they caused losses of S/12,000 million, and he believes that adverse weather conditions persist.

Actions against El Niño

Alberto Otárola, president of the Council of Ministers, explained that the budget brings together “economic, financial and social priorities for everyone” and its projections include economic recovery and the closing of gaps and immediate actions “in the face of the imminent danger of El Niño (Global )”.

They are S/4,322 million for risk prevention and reduction and S/796 million to improve the attention and response capacity via institutions such as Civil Defense or the National Water Authority, in addition to another S/1,074 million for flood protection works in various rivers in northern Peru (see infographic).

Likewise, S/450 million will be allocated to contain the attacks of frost and cold in the south, which affect livestock and crop areas.

Otárola added that just to address the emergency there is a budget of S/2,644 million, the highest in the last 12 years.

At the closing of this note, the Minister of Agrarian Development, Jennifer Contreras, supported her actions against El Niño: they will inject S/255 million to buy 250 machinery, implement Catastrophic Agricultural Insurance (SAC) to protect 1.9 million hectares, deliver 43,233 agricultural and livestock kits and 5,640 sheds and phyto-awnings. They also plan to finance women’s ventures for S/10 million and will provide S/200 million to the Agrobanco for greater reach.

The bases of the public budget

The minister Alex Contreras explained that 65.2% (S/156,895 million) are ordinary resources – coming from economic activity such as Income Tax and taxes on production and consumption. Meanwhile, the determined resources cover 18% of the budget –mainly from the canon, royalties and customs revenues–, while from credits or sovereign bonds, the participation is 12.2%.

Reactions

Alberto Otárola, president of the Council of Ministers

“As a pertinent response to the risks of natural disasters, we presented a budget for S/6,000 million and includes actions for the prevention and reduction of disaster risks.”

Alex Contreras, Minister of Economy and Finance

“It has been a year of shocks that have generated a cost of S/12 billion (…) a series of weather phenomena that have impacted agriculture and fishing. “Negative conditions remain.”