The Peruvian Government has launched this Saturday, March 23, a list of extraordinary measures in economic and financial matters for fiscal sustainability, budget balance and the efficiency of the State’s public spending.
Supreme Decree No. 006-2024, which will only be in force this year, warns that, in order not to exceed the fiscal deficit goal of greater than 2% of GDP in 2024, spending is required to be reduced each month, “taking into consideration that the fiscal deficit at the end of 2023 was equivalent to 2.8% of GDP”.
“This process requires a significant recovery in tax revenues and a moderation in the growth of public spending,” he points out.
However, contrary to the expected gradual reduction process, the Ministry of Economy and Finance (MEF) has detected that the annualized fiscal deficit as of February 2024 amounted to 3% of GDP.“in a context in which tax revenues continue to reduce unpredictably and show a weak recovery process.”
Thus, in January and February, “public spending continued to increase”, making it difficult to reverse the failure to meet the fiscal deficit goal for the current year.
“Moreover, when contrary to the expected improvement in tax revenues, in February 2024, These registered a sharp drop (-7.2% in real terms), reflecting the still slow recovery of economic activity, a weakened external sector (lower imports and prices of raw materials)the use of lower coefficients and balances in favor of the taxpayer that reduce the payment of the Third Category Income Tax (IR3ra)”, reveals the MEF.
Budget modifications in 2024
To guarantee the provision of public services by the entities of the three levels of government, in 2024 the entities of the central, regional and local governments will be authorized to make “budgetary modifications at the programmatic functional level, at their expense.” institutional budget, to finance the actions related to the functioning and operability of said specifications”.
In order to guarantee the continuity of public investments, budget modifications are authorized in favor of “investments that have an approved Technical File or Equivalent Document.”
The measure also covers investments that require starting the execution of the Technical File or Equivalent Document (as long as they have multi-year resources to guarantee the continuity of its execution until it is completed); as well as the Reconstruction Interventions through Investment (IRI) that are in execution.
Exceptionally, central, regional and local government entities, until May 31, 2024, may make “budgetary modifications at the programmatic functional level charged to resources provided in Budget Programs, provided that the budget offices or those that do your part “project freely available balances or consider that the goals should be readjusted.”
MEF: no more consulting or unnecessary trips
The Peruvian Government proposes “Measures to limit non-critical expenses and efficient use of resources of State entities and companies“, so that more is not spent in 2024 than was spent in 2023 on some items.
For example, in terms of expenses on cellular telephones and cellular radio communication, as well as travel expenses inside and outside the country and commission of services of officials and servants of the Public Sector (with exceptions, such as trips due to social conflicts, climate emergency or promotion of tourism or the Bolivarian games, among others).
Nor will it be allowed to exceed the budget for the acquisition of uniforms and clothing, except for some institutions such as PNP, INPE, firefighters and Inabif, among others, as well as in matters of advertising, printing, dissemination, and institutional image, discounting Promperú expenses. and Chancellery.
An important point is that spending on fuel consumption in each entity will be limited, spending on “seminars, workshops organized by the Institution and entertainment and celebrations”, and spending on consultancies and similar activities carried out by natural and legal persons.
“Exceptionally, the spending limit established […] can be increased by supreme decree, endorsed by the MEF and the minister of the corresponding sector, at the proposal of the latter, after evaluating compliance with fiscal rules,” he points out.
The measure also reaches the Judiciary and other autonomous constitutional bodies (Comptroller’s Office, BCRP, etc.), which must approve measures for the efficient use of their resources within a period of up to 10 calendar days from the validity of this Emergency Decree. .
Finally, for this year, the acquisition of motor vehicles is expressly prohibited, except for vehicles intended for citizen security, national defense, health services, cleaning, environmental supervision and inspection, solid waste management, disaster risk management and for the attention, care and protection of girls, boys and adolescents without parental care or at risk of losing it.
The use of official cars for public officials is limited
The use of vehicles in the entities of the Executive Branch will be only for “official use of the ministers, vice ministers, general secretaries and chiefs of staff of the Ministries”, as well as the Deputy Secretary General and Secretary of the Council of Ministers of the Presidential Office.
In the case of public universities, it is only for the official use of the rector; and, in the case of regional governments and local governments, it is solely for official use of the regional governor and the mayor, respectively.
“For the rest of the personnel of the entities of the Executive Branch, public universities, regional governments and local governments, they can use the motor vehicles in the fleet of the respective entity to fulfill their functions,” the document states.
There is an exception for Petroperú, Fonafe and the companies under their scope, where the exclusive allocation of motor vehicles is “prioritized for the fulfillment of activities linked to their production process (for example, only for oil activity).”
Exceptional Mining Canon Advance Grant
To alleviate the lack of resources, the MEF provides, exceptionally, the granting in March of the Mining Canon advance for the equivalent of 50% of the total amount of resources coming from its 2024 Institutional Opening Budget (PIA), “in favor of those regional and local governments that had not received it due to having accumulated balances pending deduction” from the advance of the Mining Canon 2023.
Free distribution of drinking water for Lima and Callao
The Peruvian Government authorizes Sedapal, during Fiscal Year 2024, to use up to S/80 million in investment balances resulting from the execution of transfers made by the Ministry of Housing, upon submission of a technical report, to guarantee continuity of the drinking water service “through the free distribution of drinking water by tanker trucks.”
This measure will benefit the population of Lima and Callao that does not have access to drinking water service and is in conditions of poverty and extreme poverty. The beneficiary population will be determined based on the list of beneficiaries presented by Sedapal.
Territorial Development Plan for the Chancay Megaport
In order to promote public investment in the area of the Chancay Megaport, the Ministry of Housing is authorized, exceptionally, to make budgetary modifications at the programmatic functional level to finance the preparation and/or updating of the Territorial Conditioning Plan of the province of Huaral and the Urban Development Plans of the districts of Chancay, Huaral and Aucallama of the province of Huaral.
“As well as the supervision of the execution of the Urban Development Plan of Lima Norte that includes the districts of Ancón, Carabayllo, Comas, Independencia, Los Olivos, Puente Piedra, San Martín de Porres and Santa Rosa,” the document adds.
These modifications will be made to the Ordinary Resources financing source, up to the sum of S/ 6 million 384,000, charged to the freely available balances of its institutional budget for Fiscal Year 2024.
The measure seeks to accelerate the territorial planning process in the vicinity of the new commercial corridor of the Chancay Megaport, since it must be inaugurated in November 2024 and no plan of this nature has yet been completed.
Collective bargaining 2024: agreements can only be temporary
During the year 2024, the collective agreements and conciliation minutes that are signed may only contain clauses that establish working or employment conditions with a temporary economic impact. What is established in this section must be considered in the issuance of arbitration awards, under responsibility.
This measure is only applicable in collective bargaining processes at the decentralized level by territorial area and by public entity, or where union organizations deem appropriate.
“Collective agreements and conciliation minutes may only contain clauses that establish “conditions of work or employment with temporary economic impact.” What is established in this section must be considered in the issuance of arbitration awards, under responsibility,” he says. the decree.
It should be noted that this measure does not include collective bargaining at the centralized level, nor does it include collective bargaining at the decentralized level by sector, corresponding to public servants belonging to special careers in the education and health sectors.
Source: Larepublica
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