The World Bank’s Board of Executive Directors has approved a loan to assist Peru in achieving a more efficient fiscal policy and a productive economy adapted to climate change. This initiative is aimed at helping the country progress toward OECD accession.
The $500 million loan supports reforms designed to close the productivity gap in Peru, where the average firm operates at only 5 percent of the global productivity frontier. The reforms focus on enhancing the credibility and transparency of fiscal policy, implementing fiscal consolidation over the medium term, reducing spatial disparities, and increasing formal, better-paying jobs.
Key aspects of the program include strengthening fiscal management by safeguarding the independence and effectiveness of the fiscal council, improving monitoring and management of fiscal risks, combating tax evasion, and accelerating public-private partnerships (PPPs) to enhance infrastructure spending efficiency.
The loan also addresses climate change adaptation needs, crucial for competitiveness in sectors such as agriculture. It promotes deforestation-free production practices and builds resilience to extreme climate events affecting poorer populations. The program further supports Peru’s innovation system, competition framework, digital transformation, Green Finance Roadmap, and Green Taxonomy. It aims to improve agricultural value chains' competitiveness.
“We support structural reforms that will allow Peruvians to achieve OECD standards of well-being, especially by significantly increasing the number of formal, well-paid jobs, generating sufficient fiscal revenues, and using these revenues to provide higher-quality public services that reduce spatial disparities,” noted Issam Abousleiman, World Bank Country Director for Bolivia, Chile, Ecuador, and Peru.
This financing represents a decisive step for Peru in its commitment to OECD accession and pursuit of inclusive and sustainable economic development.
For more information on the World Bank’s activities in Peru: https://www.worldbank.org/en/country/peru
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