Peru Expands Budget for El Niño Preparedness

Peru's Congress has approved a $2.8 billion budget expansion to improve infrastructure and essential services. The funds aim to mitigate the impacts of potential El Niño rains. This comes as President-elect Keiko Fujimori considers emergency decrees, and the fiscal council expresses concerns over Peru's financial outlook.

Peru's Congress approved a $2.8 billion budget increase late Tuesday to finance infrastructure projects and essential services. This financial boost precedes the July 28 inauguration of President-elect Keiko Fujimori. The measure, passed by the legislature's Permanent Commission with 17 votes in favor and five against, will also address safety measures ahead of heavy El Niño rains.

Approximately half of the funds are allocated to complete public works to ensure essential services, with the remainder covering public sector salaries, crime prevention initiatives, and flood control infrastructure. The efforts are especially focused on countering the El Niño climate phenomenon, which poses a significant flood risk impacting agriculture and fishing.

Keiko Fujimori indicated on Thursday that emergency decrees might be issued to activate further preventative steps. Interim President Jose Balcazar has already declared a 60-day state of emergency in nearly 40% of Peru's districts due to impending El Niño rains. Credicorp Capital Asset Management projects El Niño could result in losses of 16 billion soles ($4.70 billion) between 2026 and 2027. Meanwhile, despite the risks, Peru's central bank has raised the economic growth forecast for the year to 3.4% due to robust domestic demand and private investment.