Peru Announces $5.2 Billion El Niño Stimulus Package

Peruvian President Keiko Fujimori announced a fiscal stimulus package of about S/18 billion, or US$5.2 billion, on Thursday 22 October 2026. The measures were presented alongside Economy and Finance Minister Elmer Cuba at the Government Palace.

The government plans to raise the fiscal deficit limit for 2027 to 2.4% of GDP, up from 0.9% in the 12 months to September. This change would provide room to finance the additional spending.

“We are very convinced that the El Niño phenomenon, the rise in fuels, in no way will stop the growth of our country.”

The largest allocation is S/7 billion, about US$2.0 billion, to complete stalled public works that are far advanced. School buildings will receive S/6 billion, about US$1.7 billion, while S/2 billion, about US$583 million, will fund maintenance work intended to create jobs quickly.

Additional funds include S/2.5 billion for bonuses targeting vulnerable families over three to five months, and S/500 million for fuel subsidies. The package also covers infrastructure maintenance and support for companies facing liquidity problems.

Officials cited three factors that could slow economic activity: El Niño climate effects, higher international oil and diesel prices, and increased global interest rates. Cuba said oil prices have risen by more than 70% and diesel by nearly 120%.

The administration aims to keep the 2026 growth projection at 3.4% and achieve faster growth in 2027. Fujimori described the response as strong and historic, stating that El Niño and fuel prices will not halt growth.

The plan includes the possible use of perfect labor suspension to help companies avoid bankruptcy when sales fall or activities are interrupted.