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Peru’s Fiscal Watchdog Says Spending Rules Were Broken for Third Year as 2025 Gap Narrowed on One-Off Revenues

The council warns 2026 payroll plans outstrip the fiscal space envisioned in the medium-term framework.

Consejo Fiscal enfría celebración fiscal del MEF: déficit bajó por ingresos excepcionales
Pese a que se adoptaron medidas para contener el gasto público, el consejo considera que estas resultaron insuficientes para asegurar el cumplimiento de las reglas fiscales. (Imagen: Andina)

Overview

  • Despite a roughly 2.2% of GDP deficit in 2025, the Fiscal Council reported fresh breaches of the caps on overall non-financial spending and on current spending excluding maintenance.
  • Preliminary BCRP data show general government non-financial spending at S/241.6 billion, exceeding the rule by about S/6.6 billion with real growth of 3.5% versus a 0.7% limit.
  • Current spending excluding maintenance rose 4.8% in real terms against a 2.1% ceiling, implying an estimated deviation near S/4.1 billion.
  • The council attributes the lower deficit mainly to exceptional revenues from high mineral prices, one-off asset sales, extraordinary back-tax payments and larger income tax advances, not lasting spending restraint.
  • Late-2025 containment steps yielded only about 0.05% of GDP in savings (around S/600 million), while rising remuneration drove recent overruns and the 2026 payroll increase of S/7.8 billion far exceeds the MMM’s S/2.1 billion space, with added pressure from 26 newly promulgated laws with adverse fiscal impact.