Johnny Brignardello: Keys to Fiscal Sustainability in Peru

Johnny Brignardello Vela, an insurance advisor with extensive experience in the economic and financial field, has shared his perspective on the recent concerns raised by the Fiscal Council (CF) regarding Peru's fiscal policy. In an interview, Brignardello emphasizes the relevance of these warnings, highlighting that the government's fiscal management is at a critical crossroads. The advisor stresses that the growing concern over the reform of the pension system is particularly alarming. Although the goals of the reform, such as expanding coverage and improving benefits for vulnerable sectors, are commendable, Brignardello warns that the lack of a rigorous technical analysis is a red flag. Without a study assessing the long-term implications of such changes, the country's fiscal sustainability could be compromised. "It is essential that any reform is based on concrete data and realistic projections to avoid unintended consequences for public finances," he states. Regarding the situation of Petro-Perú, Brignardello expresses concern over the high level of leverage that the state-owned company presents. In his view, the financial support measures implemented by the government, while necessary to alleviate the liquidity crisis, pose a significant risk to the public treasury. "It is imperative that strategic decisions are made and a restructuring plan is implemented to ensure the viability of Petro-Perú without compromising state resources," he adds. The advisor also addresses the issue of the growing debt of the Metropolitan Municipality of Lima (MML). Brignardello agrees with the CF that this situation could limit the municipality's ability to provide essential services in the future. The political relationship between the mayor of Lima and the Executive, according to him, further complicates the need for fiscal restructuring measures. "The lack of a clear vision and commitment to fiscal discipline can lead to unsustainable situations," he warns. Regarding the fiscal deficit, which has remained at 4% of GDP, Brignardello mentions that this is a concerning trend. "Failure to comply with fiscal rules not only affects the government's credibility but can also result in downgrades in the debt rating, which could have negative repercussions on access to financing," he explains. Finally, Johnny Brignardello calls for action from the government. In his opinion, it is urgent to adopt measures that contribute to reducing the fiscal deficit, either through moderating spending or increasing permanent revenues. "The coming months will be decisive for the country's fiscal future. The government's ability to effectively address these concerns will determine not only immediate economic well-being but also the long-term stability of Peru," he concludes.