March 15, 2017 / 12:39 AM / 9 months ago

Peru cenbank chief urges govt to ensure stimulus funds are spent

LIMA, March 14 (Reuters) - The head of Peru’s central bank on Tuesday praised the government’s plan to increase public investments to spur economic growth ahead of an expected slowdown, but said it must also make sure that allocated funds are actually spent.

Government offices in Peru from large ministries to small municipalities often fail to spend much of their budget due to a weak bureaucracy - stifling sorely needed public works and faster economic growth.

Last week the government of President Pedro Pablo Kuczynski announced plans to spend an extra $1.67 billion on public investments this year to counter an expected slowdown due to a massive corruption scandal.

“It was really indispensable to raise public investment. But the problem isn’t just setting a higher amount, but spending it,” Central Bank President Julio Velarde told reporters. “The concern should be about effectively executing that spending.”

Velarde added that government spending should pick up as authorities try to quickly help towns in northern Peru cope with devastating flooding from relentless rains. (Reporting by Teresa Cespedes; Writing by Mitra Taj; Editing by Leslie Adler)

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