World Bank approves $500m loan for Peru’s economic reforms

The executive board of the World Bank has recently approved a $500 million loan to support Peru in enhancing its fiscal policy and economic productivity while adapting to climate change.

This significant financing aims to help Peru close its productivity gap, where local firms are only 5 per cent as productive as the global frontier.

The loan will fund reforms to improve fiscal management by reinforcing the fiscal council’s independence, combating tax evasion, and expediting public-private partnerships (PPPs) for better infrastructure efficiency.

Additionally, the programme focuses on climate adaptation, promoting deforestation-free practices, and bolstering resilience against extreme weather events, particularly those affecting the agriculture sector.

The initiative supports Peru’s goals of Organisation for Economic Co-operation and Development (OECD) accession by fostering formal, well-paying jobs, boosting fiscal revenues, and enhancing public services to reduce spatial disparities.

It also aligns with Peru’s Green Finance Roadmap and Green Taxonomy to improve agricultural competitiveness and drive sustainable economic development.

Issam Abousleiman, World Bank Country Director, emphasised the importance of these reforms in achieving OECD standards of well-being and economic progress for Peru.

Attribution: The World Bank Group Statement