He fiscal deficit recorded an improvement in the last 12 months. As of October, the superiority of Government expenses compared to its income represented 2.3% of GDP, according to the Central Reserve Bank (BCR). With this new mark, the deficit would be closer to the Executive’s commitment to bring it to 2.2% at the end of the year. It should be noted that, at the end of September, the negative gap between State income and expenses represented 2.5% of GDP.
However, the bad news is that the deficit was not reduced because the Government was more prudent with spending, but because tax revenues increased and debt service was reduced. According to the BCR, on the contrary, non-financial expenditure increased in real terms, in particular, due to the increase in other capital expenditures and, to a lesser extent, current expenditure.
According to the monetary authority, “the increase in other capital expenditures reflects, mainly, the honoring of guarantees for the foreign trade credit of the Banco de la Nación to Petroperu (…), associated with the financial fragility of the company.”
“In October 2025, the honor of guarantees amounted to the equivalent of S/379 million, accumulating a total of S/2,415 million in the period June-October 2025,” the BCR stated.
Income
On the other hand, income increased its share from 19.2% of GDP in September to 19.3% of GDP in October. According to the BCR, the increase in income is related to GDP growth and the favorable situation of export prices.
Added to the above, the BCR added, was a higher level of extraordinary income associated with inspection actions by the tax authority.
Regarding the reduction of debt service, the monetary authority explained that the appreciation of the sol, as well as changes in the debt maturity structure, mainly influenced a lower interest payment.
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