El Niño set to dictate Peru's public investment this year
The El Niño weather phenomenon is set to dictate investments by the Peruvian government in the remainder of the year, as there is a growing likelihood of a strong impact on the coast, which will lead authorities to step up investments in preventive infrastructure.
The economy and finance ministry (MEF) reported that it has 3.2bn soles (US$860mn) to invest by the end of the year and that it will continue transferring funds to the regions for disaster prevention works in readiness for the summer of 2024 (December-March).
"We have been clear [regarding the issue of budget spending]: if a sector does not spend, those funds will be reallocated to those that do," MEF minister Alex Contreras said at a press conference.
He added 3.8bn soles has already been approved for works to prepare for the situation, which will likely involve heavy rains and flooding in parts of the country and drought in others.
Contreras also underscored that the MEF recently approved 219mn soles in funds for the agriculture and irrigation ministry to deal with water stress problems, as well as 21mn soles for works under the reconstruction with changes plan, and another 22mn soles for preventive works to be carried out by the government of Lambayeque region.
Nevertheless, the government spending will continue: "We are acquiring 120 machines for a total of 260mn soles to strengthen the preventive response capacity throughout the national road network. That purchase will be awarded at the end of August," transport and communications minister Paola Lazarte said at a separate press conference.
ADDITIONAL FUNDS
The MEF has also pointed out that, in parallel with the funding for preventive works, there is 4bn soles available and not yet budgeted to finance public projects. Of that amount, 3bn soles is expected to be assigned to local governments and 1bn soles to regional governments, which could "make it viable to carry out more investment projects that serve as a positive shock to improve expectations in the short term and promote private investment," the ministry stated in a release.
As of the end of July, cumulative public investment totaled 21.6bn soles, which was 10.2% higher than in the same period of last year.
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