Economist Waldo Mendoza would be the new Minister of Economy and Finance | MEF | Francisco Sagasti

The economist Waldo Mendoza would be the new owner of Ministry of Economy and Finance (MEF), under the transitional government of Francisco Sagasti.

Mendoza will replace Jose Arista, who he only spent four days in office after the departure of Manuel Merino.

This would be the first time that Mendoza will take over a ministry, but he already has previous experience in state entities. Between 2005 and 2006, during the government of Alejandro Toledo, he was vice minister of finance.

The economist, educated at the San Cristóbal de Huamanga National University and the Pontificia Universidad Católica del Perú, has served to date as president of the Fiscal Council (CF).

He has also been a member of the Central Reserve Bank (BCR), head of the Department of Economics of the PUCP, and president of the Board of Directors of the Consortium for Economic and Social Research.

Position regarding the projects of Congress

The possible new head of the MEF had previously criticized some of the initiatives of the Legislative Branch in the middle of the pandemic.

“It gives the impression that economic theory is lacking in the support of different projects that we see parading from Congress. The political class is not understanding that we are in other times,” he commented to a local media.

As he pointed out, the project that would allow the removal of contributions from ONP it would cost about S / 15,000 million to the Public Treasury.

“It is up to the State to ensure compliance with the Constitution. And this is very clear: Article 79 says that the representatives of Congress have no initiative to create or increase public spending, except in regard to their budget. So the initiatives on the ONP are in flagrant contradiction with this article “

He indicated that the Executive would have as one of its great tasks to win the fight in the Constitutional Court (TC), to avoid measures that imply more spending, taking into account the fiscal deficit that the country currently has.

In June, Mendoza noted that the tax collection this year it would fall between S / 30 thousand and S / 50 billion.

“In the future, starting in 2021, we must think about reconstituting the finances that have been hit. Spending will also go up. fiscal deficit will be between 7% and 12% of GDPFigures that we did not have since the late 1980s, “he said in Ampliación de Noticias.

In his consideration, taxes should not be raised in the midst of this pandemic scenario.

What steps could you take?

In a recent interview in RPP Noticias, the economist indicated that in his evaluation it is possible that the Peruvian economy will reactivate “sooner”, due to the large number of infected in the country.

“You have to take care, but the possibility that the Peruvian economy will reactivate sooner than other economies is a projection that I can affirm, because if that risk that emphasizes [respecto al tiempo de la inmunidad], does not appear, the epidemic is going to fall, because the number of infected in Peru is already very large, “he said.

As president of the CF, issued a report in which it indicated that the MEF should address the following central concerns to restore the country’s fiscal solidity:

  • The restitution of the fiscal rules from the year 2022,
  • The projection of the medium-term fiscal accounts.
  • The intensity and feasibility of the fiscal consolidation process required in the coming years.

In addition, it pointed out that Peruvian economy could fall more than it had projected the former head of the MEF, María Antonieta Alva.

As indicated by the MEF in August, GDP would fall 12% this year. However, the specialist considered that the setback would be greater.

By 2021, he commented that the MEF’s task should be reduce debt.

As he pointed out, a measure to avoid further economic downturns is avoid the legislative projects that involve expensesWell, “it’s like pouring gasoline on a fire that doesn’t end.”

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