Alfredo Thorne: “We are the country that grew the most in 2021 because it was the one that gave the most stimuli in Latin America”

Peru would grow 13% in 2021 and will lead regional growth. Are you happy about this number?

We have to be realists. It’s a good way out of the recession we had in 2020. We bounced hard and that bounce came in several phases, it came at the end of the second quarter and then in August it was strong. If we annualize the figures for the third quarter, we grew 13%, which is quite high and I think the minister also mentioned the figures for investmentSo there was activity, but that would also have to be weighed.

Why?

Because We are a country that spent about 18% of GDP on fiscal stimuli. In Reactiva 9% and another 9% in a fiscal deficit and we have also used all our savings.What was destroyed in pension funds is equivalent to 10% of GDP, it is as if we had broken the pig and spent everything. This allowed families to buy food, the products they need, but leaves us unprotected for the future.

The country, due to the pandemic, needed these stimuli for poor families …

If we compare ourselves with the rest of the Latin American countries, it did not use this amount of stimuli. When we say that we are the country that grew the most in 2021, it is because we are the country that gave the most stimuli in Latin America.

Fiscal stimulus also occurred in the US, in Europe. It is a model that even the International Monetary Fund recommended raising with two objectives: propping up growth and reducing the poverty that soared in the pandemic.

At that time, he was strongly convinced that in 2020 more bonds should be given to families. The fact that the Government did not give more bonuses forced Congress to touch pensions and the CTS. It seemed logical to me to use the CTS, but the Government focused its stimulus above all on Reactiva Peru, which was a fantastic program designed by the Central Bank. Where it seems to me that there was too much spending, little controlled and we are seeing it in the budget execution. The Government cannot spend resources efficiently and this is the serious problem of today.

How much do you estimate the country will grow this year?

We think that we are going to grow 2.7% and 2.6% next year and inflation for this year at 3%.

Why these figures?

Because once the stimuli dissipate over time, mainly until the last quarter of last year, we begin to converge to our long-term growth; that is, the potential growth rate defined as that which allows us to use all our resources. Today that rate is at 2% because thanks to the previous Congress a series of reforms were reversed and we have not focused on boosting productivity. For example, the schools are going to return in March, but they do not have internet access, some do not have water, they do not have a sewer. This lack of resources makes our growth stay a bit frozen at 2%. In 2016 that rate was close to 3.7%.

At the end of 2021, public investment reached S / 39,103 million and according to the MEF it is a record. What does it tell us?

It is data, it is hard evidence. We don’t have to question it. Sounds great to us, but two things have to be remembered: One, a lot of this execution is due to the rebuilding of the north, where the UK Government was contracted to help carry it out. Success is that. It was a system that we devised in the MEFWe designed the Pan American Games from the MEF, and we made changes to the legislation and finally, at that time, we also chose the United Kingdom to help us carry out the works. It’s not a surprise, it’s a good thing.

And the second part?

We cannot compare a year like 2021 and forget what happened in 2020. The logical thing would be that we take the average for 2020 and 2021 and what we are going to realize is that the execution is not good if we take the United Kingdom out and take an average of 2020 and 2021. There are statistics that the MET could also put in which many regional and municipal governments executed about 30% of their budget. It is outrageous, it is money that is lost.

Is fiscal policy going well?

It must be seriously analyzed. It gives me the impression that the MEF does not tell us things as they are. In an article published by the minister (Pedro Francke) he says that last year we are going to have the lowest fiscal deficit, and at the same time they had an additional S / 13 billion in mining income and from some mining companies that paid (tax debts). If we add the S / 13 billion to the deficit, that is, we assume that this money never arrived, the deficit would be 6%. The reduction in the deficit was due to an extraordinary temporary income that will not be repeated over time.

You are a right-wing economist, and vacancies are on the agenda of right-wing groups. Do you support the presidential vacancy in times when the country requires unity and respect for the institutional framework of the Presidency of the Republic?

Since it requires me to define myself. I am very conservative in economic management. I respect the markets, I respect the freedom of the markets, but I am very liberal in the social issue and proof of this are the initiatives that we launched in the MEF such as social protection, etc.

And about the vacancy?

I do not agree with the vacancy. Our Constitution has two escape clauses: the vacancy and the closure of Congress. The moment any group uses any of these escape clauses, all we do is generate more confrontation. What the Constitution requires us is to agree. We have to talk, agree and that is what we have not done since 2016, the only thing we have done is that the Executive and the Legislature fight.

What is required for it?

We need an Executive who complies with the rules of the game. And it seems to me that President Castillo is not doing it, he did not make his visits to Breña’s house transparent, he did not make transparent the issues that the press has discussed, such as the direction of Petroperú projects, it is a serious problem as denounced by many media outlets. press.

And the Congress?

Congress cannot every time Mr. Castillo slips, tell him “we are going to vacate you.” I think they both have to correct themselves, they have to straighten out. And Mr. Castillo cannot think that he is going to do socialism when he does not have any support for it. It has to seek a consensus within the different political parties that are in Congress and seek a cabinet that represents them because, if not, we will not be able to move forward.