Public investment may grow again in Nov 2020 in Peru: Central Bank

LIMA, Nov 20, 2020, ANDINA. Peruvian Central Reserve Bank (BCR) Governor Julio Velarde on Thursday announced that public investment may rise again in November, adding that this boost will be essential for accelerating the national economy’s recovery process, ANDINA reported.

“We can do a lot with a monetary policy, but public investment is essential if we want the recovery to be fast,” he expressed.

The BCR official highlighted that the multiplying effect of public investment on the economic activity is much higher than that of current spending.

“It is even greater than the multiplier generated by the tax refund,” he remarked.

Velarde said a document —issued by the International Monetary Fund (IMF) last October— had indicated that the multiplying effect of public investment in the economy is almost 2.7 times.

The economist also explained that information on public investment (available until November 17) suggested that the figure will be positive this month.

The Ministry of Economy and Finance (MEF) recently reported that the performance of public investment returned to the positive path and grew 6.6% last October if compared to the same period in 2019. It even exceeded the figures reached in the same month during the last decade.

Last October, public execution reached S/3.652 million (about US$1.009 billion), while in September it totaled S/3.426 billion (about US$947 million).