Report: What has the government done to support Peruvian households?

Presidential government Peter’s castle marks one year in the midst of high inflation and a global food crisis that is affecting the pockets of Peruvians who have already been hit by the pandemic.

Faced with this situation, what did the government do last year to support at home?

To cushion the rise in prices, the government has proposed an exemption from the General Sales Tax (IGV) on chicken, eggs, sugar, pasta and bread, but this measure has not had the expected impact on the markets.

Why has there been no price reduction since exemption from VAT to staple foods? Former Economy Minister and Director of Videnza Consultores Luis Miguel Castilla commented on the RPP.

“This five-product measure initially softened the impact of the increases, but they weren’t avoided. Why? Because we see that after the second month, except for sugar prices, they all increased. because basically in many cases the purchase of these products is made in supply centers, in markets that do not give IGV, they are given in informal centers, many do not use IGV or are bought in establishments that use simplified regimes, such as rus, in informal establishments , which do not give IGV, and the fiscal costs were not less,” he explained.

It should be remembered that a recent analysis by the Central Reserve Bank showed that the VAT exemption had a greater impact on supermarkets, which saw a drop of 14% to 16% in early May, but in supply markets, the decline was only less than 3% on average.

Another measure related to tax incentives was the reduction of the IRR of some fuelwhich also didn’t work out the way consumers expected.

“The repeal of the selective tax softened the increase in consumer prices for fuels such as diesel for vehicles and gasoline with an octane rating of 84 and 90, as well as for a 10-kilogram gas bottle, but had a partial effect, did not prevent the same prices from being increased, it was just a patch for higher promotions,” Castilla said.

In addition to the elimination of IGV and ISC, LPG entry into stabilization fundmeasures totaling more than 3 billion soles, twice the resources of Qali Warma and four times the resources of the Together program.

As a support for the poorest, the next delivery of a food bonus has also been announced, which is still in the pipeline and will be around S/300, according to the latest mentions from the Ministry of Economy. But will this measure be enough? former Minister for Development and Social Inclusion Carolina Trivelli commented on this.

“It is important to know whether it will be a one-time award or there will be several. bonds while. just as we recommended that it be a temporary aid to mitigate the effect of food increases, it should accompany families for a long time (…) In addition to providing direct support such as bonuses, it should provide effective support for pots and soup kitchens and mothers’ clubs in an efficient way. we have a lot of advertising, but we do not see this happening, ”said the specialist.

Have employment measures been proposed?

For various professionals, the main thing for the government should be not only to mitigate the negative effects through subsidies, but also to encourage investment to create more jobs. And what has been done for employment over the past year?

Grade economist and principal researcher Miguel Jaramillo recalls that at the beginning of his administration, the Department of Labor proposed a series of measures in the so-called “Agenda 19”, in which he warned that the generation official employment this is the missing policy.

“In fact, the government did not have a program to improve formal employment, it had a program aimed at a specific group, consisting of formal employees, among whom it sought to strengthen collective bargaining, limit forms of contract such as outsourcing. It cannot be said that this government sought to improve or increase formal employment, rather it sought to meet the needs of a small group in the labor market,” he specified.

Jaramillo emphasizes that the executive needs to put the creation of formal employment at the center of its work agenda, which, according to the National Institute of Statistics and Informatics (INEI), accounts for only 23.9% of the population, while informality it affects more than seven out of ten Peruvians.

Experts and trade unions warn that in a country where poverty reaches one in four, the government has not taken concrete steps to help the most vulnerable over the past year.