Peru | The inexorable fiscal arithmetic

Global public finances face rising debt and higher costs. Unlike France (122% of GDP), Peru maintains a solid position with debt below 30% of GDP and 3.5% growth, allowing it to address contingencies while maintaining sustainability.

Key points

• Key points:
• Global public debt has risen from just over 60% of GDP in the early 2000s to over 90% today, according to the IMF, reducing the margin for investment and social programs.
• Fiscal sustainability depends on growth (g) exceeding the debt interest rate (r). If r > g, a primary surplus is required to stabilize the debt.
• In contrast to the situation of France, Peru maintains public debt below 30% of GDP and a fiscal deficit that is expected to close 2026 between 1.5% and 2%.
• The country's fiscal strength allows it to address contingencies such as the effects of El Niño, with support measures amounting to more than one point of GDP, without compromising long-term sustainability.

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