UPDATE 2-Peru to boost spending in response to crisis
(Reuters) - Peru passed a series of decrees on Monday allowing the government to accelerate spending on infrastructure in order to stoke the local economy and fend off fallout from a new global economic crisis.
Finance Minister Luis Miguel Castilla said the decrees were "preventive" and responded to a "deterioration in the external environment."
"The initial fiscal stimulus we calculate between 0.4 and 0.5 percent of gross domestic product, this will maintain a fiscal surplus of above 1 percent this year," he told reporters.
Peru is the world's No. 2 copper producer and minerals account for around 60 percent of its exports. Anemic growth in the developed world could reduce the demand for raw materials.
The measure will provide Peru's central and regional governments with 890 million soles ($324 million) to build roads and complete other infrastructure projects.
A second decree allows the ministers of housing, health and education to use available funds for investment projects.
Peru's economy grew 8.8 percent in 2010, one of the world's fastest rates. The economy is expected to expand between 6 and 6.5 percent this year.
Central Bank President Julio Velarde cited less public spending as a key reason for slowing growth last week, and said it was important for the government to speed up investment plans that had been delayed. For details, see
Castilla said the government would take additional action if needed.
"In the future there will possibly be other measures meant to ensure that the economy continues to grow and can handle any onslaught that comes from abroad," he said. ($1 = 2.74 Peruvian soles) (Reporting by Terry Wade, Marco Aquino and Caroline Stauffer; Editing by Leslie Adler and Diane Craft)