Peru’s Congress Approves 2010 budget (The budget contains an 80% increase for defense forces)

LIMA – Peru’s Congress Friday approved the executive branch’s 2010 fiscal budget proposal worth about 82 billion soles ($29.2 billion) by a 51-26 vote. That compares with a budget of some PEN72 billion originally presented by the executive branch for 2009.

The 2010 budget contains an 80% increase for defense forces, part of which will go to battling the illegal drug trade. The unicameral legislature also passed separate bills approving, among other things, public sector debt financing for next year.

Government news agency Andina said that external and internal public sector borrowing for 2010 is seen at PEN9.68 billion. The central government has said it wants permission to borrow up to $2.14 billion in external debt, and up to 2.67 billion soles ($903 million) in the domestic market in 2010.

Peru’s fiscal deficit is seen narrowing to 1.6% of gross domestic product in 2010, after reaching an expected 2.0% of GDP in this year, the Finance Ministry has said.

Source: Wall Street Journal