Peruvian President Pedro Pablo Kuczynski renewed his promise Friday to spur a faster economic expansion in the Andean nation, forecasting at least 4 percent growth in 2018 following a year of setbacks that he apologized for not handling better.
Addressing lawmakers and the public on Peru’s Independence Day, Kuczynski said he was sending Congress a proposal to speed up property transfers to make way for infrastructure projects after flooding and a graft scandal knocked growth prospects.
But Kuczynski did not announce any other economic measures in a speech that was more than an hour long and marked the start of his second year in the presidency.
Expectations dashed
Kuczynski had raised expectations upon taking office a year ago that the copper-producing country’s economy would improve with the former Wall Street banker and World Bank economist at its helm.
But Kuczynski’s plans to jump-start economic growth through infrastructure development and lower taxes were derailed this year by an unexpectedly brutal rainy season and revelations that Odebrecht, a Brazilian builder with an outsized presence in Peru, had bribed local officials for at least a decade.
“Maybe I underestimated the titanic effort that was needed to re-establish economic growth in this context. I apologize if that was the case,” Kuczynski said in Congress as he read from a speech that his office said he wrote.
Mending fences
The gesture might help Kuczynski mend fences with the right-wing opposition party that controls the single-chamber Congress and has pressured three of his ministers to resign.
Kuczynski’s government is also under pressure from striking public sector teachers and doctors whose protests to demand better wages have blocked roads and tourism in parts of Peru in recent weeks.
Peru’s economy is on track to expand by less than 3 percent this year, down from 3.9 percent in 2016, as unemployment rises, tax revenues plummet and the fiscal deficit grows.
Kuczynski called the current growth pace “totally inadequate” for a country with such a young population, and said investments in post-flood rebuilding combined with better prices for Peru’s mineral exports should ensure growth of at least 4 percent next year.
“Peru will get its rhythm back! I’ll make sure of it,” Kuczynski said.
But in a sign of the gloomier outlook, Kuczynski said he now aims to end his term in 2021 with the poverty rate at 15 percent, down from about 20 percent last year but far from the goal of 10 percent he announced before taking office.
