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Peru’s Fiscal Council Warns Congress’s Spending Laws Put Debt on Track Toward 70% of GDP

The watchdog pressed the Constitutional Court to scrutinize recent statutes after projecting sustained deficits if a swelling docket of unfunded benefits advances.

Overview

  • The council tallied 229 laws with adverse fiscal impact since 2021, including 101 enacted by insistencia at a combined cost of about S/ 35,796 million.
  • It identified 352 additional initiatives in process, with the 10 costliest implying roughly S/ 25,000 million in annual outlays concentrated in rigid salary and pension commitments.
  • Baseline projections show the fiscal deficit averaging about 5.8% of GDP in 2026–2036, with debt reaching around 47% of GDP under already enacted laws and approaching 70% if key pending bills pass.
  • The Executive underused its controls, failing to observe 56% of nearly 230 such norms and sending only three of 181 spending measures to the Constitutional Court, as the council offered to serve as amicus curiae.
  • Process gaps cited include laws moving without cost estimates or Budget Committee scrutiny, with the teacher class-bonus law (31495) flagged as the single most expensive approved measure at S/ 40,561 million.