August 30, 2016 / 6:50 PM / 3 years ago

UPDATE 1-Peru lifts proposed budget spending for 2017

(Adds details from budget proposal, context)

LIMA, Aug 30 (Reuters) - Peru under new President Pedro Pablo Kuczynski will propose a 2017 budget that is up a nominal 4.7 percent from last year, with a focus on social projects and infrastructure, the government said on Tuesday.

It will propose a budget of 142.5 billion soles ($42.2 billion) for 2017, equivalent to around 20 percent of gross domestic product, according to a government document published on the Congress website on Tuesday.

Kuczynski, a 77-year-old former investment banker, took office July 28 after campaigning on promises to cut taxes, boost infrastructure investments and deliver running water and better quality health services and education to millions of Peruvians.

Peru’s economy has more than doubled since the start of the century, helped by high prices for its mineral exports during a decade-long commodity boom. But one in four Peruvians still lives in poverty and many towns lack basic services.

The 2017 budget was drawn up “maintaining fiscal management that guarantees fiscal sustainability and implies nominal growth of 4.7 percent from the 2016 budget,” the document said.

The government forecast at the weekend that the economy would likely expand 4 percent this year and 4.8 percent next year, boosted by new mines ramping up.

The 2017 budget proposal will include the issue of up to $2.5 billion in bonds, as well as debt swaps, buybacks and other tools to improve Peru’s debt profile by up to $6 billion. ($1 = 3.3736 Peruvian soles) (Reporting by Ursula Scollo, writing by Rosalba O’Brien; editing by Chizu Nomiyama)

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