Kurt Burneo assures that public finances are “managed prudently.”

Public finances are managed prudently, assured the head of the Ministry of Economy and Finance (FEM), Kurt Burneo.

In his speech to the Congressional Budget Committee Minister of Economy He pointed out that prudent public financial management implies that debt will decrease over time and that in the long run the country will become more solvent and less risky.

“Being less risky, this will mean that in the future when sovereign bonds are placed, the yield on these bonds will be lower simply because public finances have been managed and managed with care,” he said.

burning He argued that as we become more financially disciplined, there will be more room for operating and capital spending, the parts into which the republic’s total budget is divided.

“As we become more financially disciplined, this will increase debt servicing relative to the overall budget, will tend to contract, and this will open up room for increased operating and capital spending,” he commented.

In addition, he explained that if we continue to reduce the budget deficit, then the public debt will be reduced, which will mean lower interest rates on future loans.

Contingency reserve expense

On the other hand, the Minister indicated that most of the resources State treasury reserve in case of unforeseen circumstances planned for this year were used to purchase vaccines against covid-19.

“In the initial budget, the contingency reserve was about 1,655 million soles, and most of this amount was allocated to what is the payment for the purchase of vaccines,” the head of the MEF said, explaining that the reserve is a fund that is used to provide assistance in emergencies not included in the original budget.

Burneo appeared before Congress to support the financial part of a government bill that approves an additional loan for financing purchasing a vaccine against COVID-19.

“We are talking about an additional loan of 1,185 million soles, which makes sense to offer it with a legislative initiative, because with the additional loan we change the income and expenses of what is the general budget of the republic, which is obviously approved by law, so its the amendment should have a similar characteristic,” the minister said.

The head of the MEF has indicated that resources will come from debt with the International Bank for Reconstruction and Development (IBRD) and that this is fully consistent with previous coordination with the Ministry of Health.