Peru Broadens Economic Stimulus After Extending Lockdown

(Bloomberg) -- Peru’s President Martin Vizcarra announced a series of new short-term measures to inject cash into the economy and keep companies afloat after extending a nationwide lockdown to stem the coronavirus outbreak.

Speaking in an a televised address Thursday, Vizcarra listed measures ranging from suspending obligatory pension contributions for one month to subsidies for lower-income salaried workers.

At the same time, the central bank is working with the Finance Ministry on a “very powerful” package of measures to provide companies with the liquidity they need to keep operating, Vizcarra said.

Peru is moving to ramp up fiscal and monetary stimulus as stay-at-home measures bring economic activity to a virtual halt while the global coronavirus pandemic curbs demand for the country’s top export item, copper. The country saw a jump in local infections to 580, from 480 on Wednesday, representing the biggest daily increase since the first case was reported on March 6.

The government’s latest round of measures seek to give a short-term boost to domestic demand by putting as much as 5.7 billion soles ($1.7 billion) into the pockets of salaried workers. The steps include letting the workers withdraw up to 2,400 soles from unemployment savings.

In addition, municipalities will be given 200 million soles to fund distribution of essential goods among the poor, complementing the program to give cash handouts to 3.5 million low-income families, the president said.

Vizcarra said the army is calling out 10,000 reservists to bolster military patrols during the state of emergency as too many people are disobeying the stay-at-home order in some areas. The containment measure was due to end March 30 and will now remain in force through April 12.

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