Peru approves $2.8 billion budget hike ahead of Fujimori transition

By Marco Aquino

LIMA, July ‌15 (Reuters) - Peru's Congress ​approved ​late Tuesday a $2.8 billion budget expansion to fund infrastructure projects, essential services and other purposes, offering financial support ahead ‌of the July 28 inauguration of President-elect Keiko Fujimori.

The measure ⁠was passed by the legislature's Permanent Commission with 17 votes in favor and five ‌against, and will also help ‌fund safety measures for heavy El Niño rains.

• About half the new funds will go toward completing public works to ensure essential ​services; the remainder will cover public sector salaries, crime initiatives and flood-prevention infrastructure.

• The measures will particularly focus on preventing the ⁠El Niño climate phenomenon, which could trigger widespread flooding and hurt the agricultural and fishing sectors.

• ​Fujimori said on Thursday she may issue emergency decrees to activate further preventative measures.

• Interim President Jose Balcazar ​has already declared a 60-day state of ‌emergency in nearly 40% of Peru's districts due to imminent danger from intense El Niño rains.

• El Niño ⁠could leave Peru with losses of 16 billion soles ($4.70 billion) between 2026 and 2027, mainly due to damage to infrastructure on the northern coast, according ⁠to a Credicorp Capital Asset Management report published this week.

• Peru's fiscal council, an ​autonomous body that monitors public finances, expressed "concern" last week over the fiscal outlook after reviewing the supplementary credit proposal.

• The council said the government had chosen to ‌expand the budget rather than use the unexpected revenue windfall to build precautionary savings or contain spending ‌pressures.

• Despite the climate risks ahead, Peru's central bank recently raised its ⁠economic growth forecast for this ‌year to 3.4% from ​3.2%, citing strong domestic demand and private investment.

($1 = 3.4023 soles)

(Reporting by Marco Aquino, Writing by Natalia Siniawski; Editing by ‌Alexandra Hudson)

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