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Peru planning structural reforms over next 100 days

Xinhua, August 19, 2016 Adjust font size:

Peru will begin structural reforms over the next 100 days to build a modern country that grows at 5 percent a year, Prime Minister Fernando Zavala said on Thursday.

This announcement was made to a session of Congress during which Zavala presented the government's plan, in order to gain a measure of support from the opposition Popular Force party, which controls 73 seats out of 130.

"We are convinced of the need to begin structural reforms that help the formalization of the job market, alongside an ambitious plan of public investment and a simplification of the tax regime," Zavala said in a speech that lasted over two hours.

The prime minister said that these steps, once activated, would start a prolonged expansion of the economy, leading the country to eventually grow by 5 percent a year.

"We will work to create internal drivers of short-, medium- and long-term growth in an international context. This is an urgent task," he added.

Zavala also outlined some of the challenges set out by the government of President Pedro Pablo Kuczynski to be accomplished by 2021.

These include having 60 percent of the working population in formal employment, and reducing social infrastructure gaps by 50 percent through investments in transport, education, health, water access and sewage systems.

Alfredo Thorne, the Minister of Economy and Finance, said that Peru hopes to see 4 percent growth in 2016 due to the new government's planned economic measures.

According to the minister, Peru's economic expansion is set to continue and reach 4.5 percent of gross domestic product (GDP) in 2017.

"What we are doing will have a delayed effect, we will feel its impact on GDP in early 2017," said Thorne, adding that the government was not rolling out new policies and adjusting expenditure.

Thorne added that the government's drive to increase formal labor to boost economic development would lead to 60 percent of the country's workforce being formally employed within the next five years.

An engine of economic growth will also come from increasing private consumption, boosting the internal market, which has been depressed in recent years, said the new finance chief.

Thorne also said that the new president had anchored his initial development plans over two years, in order to see quick improvements to GDP growth and productivity. Endit