LIMA Aug 28 Peru plans to open part of its $7
billion fiscal stabilization fund to investments abroad in a bid
to protect spending capacity from swings in global mineral
prices and dips in mining output, the government said on
Finance Minister Luis Miguel Castilla said modifications to
the fund were in the works, but did not specify how much its
current $7.1 billion might be freed up for investments.
"Concepts related to the use of the fiscal stabilization
fund are going to be modified... to be able to make some of its
assets profitable," Castilla told lawmakers in a televised
presentation on the economy.
Castilla also said President Ollanta Humala wants Congress
to pass adjustments to current fiscal rules to decouple
government spending from swings in the Andean country's mineral
exports. The bill will be sent to Congress next month.
"This is critical if we want to close the infrastructure gap
while obviously still being fully responsible in terms of
spending and fiscal discipline," Castilla said.
Mineral exports make up around 60 percent of Peru's overall
export earnings, and about 20 percent of government revenue
comes from mining.
Castilla said fiscal policies designed to counter the
ups-and-downs of metals markets and mining output are long
overdue in Peru, where economic growth has slowed more than
expected this year due to slumping exports and weaker prices.
"We are moving toward a concept of structural accounts and
that is where the world is moving with a new generation of
fiscal rules that we want to establish," Castilla said.
Neighboring Chile has used two sovereign wealth funds since
2006 to capture and invest windfalls from its copper exports.
Last month the Humala administration proposed establishing a
rainy-day fund to house some of the millions of dollars that
provinces receive from mining.
Peru is the world's second-largest copper producer after
Chile and the sixth-largest gold producer.
Peru's government expects the economy to expand by 5.7
percent this year, instead of by 6.3 percent as forecast