Peru launches the most ambitious economic support plan in Latin America

In a Lima market, April 4. Rodrigo Abd / AP

It’s an economic plan "Unprecedented, daring and responsible", at the height of a crisis " unprecedented ", Peruvian Minister of Economy and Finance Maria Antonieta Alva said on Friday April 3, a few days after the announcement by the Head of State, Martin Vizcarra, of an ambitious economic recovery plan. In total, 12% of GDP, or 26 billion dollars (about 24 billion euros), will be released to respond to the health emergency and to breathe new life into a stalled economy.

While growth projections were in the order of 3 to 4% for 2020, with the crisis they collapsed. Analysts predict that growth could lose up to two points this year.

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As elsewhere in the world, Peru is facing the Covid-19 epidemic, with 2,281 confirmed cases and 83 deaths according to the latest report, Sunday April 5. President Vizcarra, who declared a state of emergency very early – on March 15, when there were less than a hundred cases in the country – imposed drastic confinement, total closure of the borders and a cover fire between 6 p.m. and 5 a.m. Measures extended until April 12 with restrictions each time stronger.

Since April 2, days of exit are differentiated for men and women, three days each, and prohibition to go out for everyone on Sunday. A surprising measure – also taken in Panama -, justified by the fact of limiting the crowds on the streets and simplifying controls. The economy, it is paralyzed up to 70% according to the Peruvian Central Bank.

Two-step plan

The stimulus package, hailed by the UN Economic Commission for Latin America and the Caribbean, is said to be the continent's most ambitious. It will take place in two stages. A first phase called "containment", with a tranche of $ 8.5 billion to support the health system and reverse the epidemic. Aid will be released as a matter of urgency when in certain regions, everything is lacking: protective equipment, beds, staff, respirators.

"We have the financial shoulders to take these bold steps", Maria Antonieta Alva, Minister of Economy of Peru

The plan also includes economic support for the most vulnerable as well as aid for small and medium-sized enterprises, for which the State has undertaken to cover 35% of the salaries of employees earning less than 1,500 soles (400 euros) per month.

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