Peru's Central Reserve Bank (BCR) has upgraded its 2017 infrastructure public spending growth forecast from 7.4% to 11%, driven by reconstruction works required to address the aftermath of Coastal El Niño.
"Following a three-year drop, public investment growth [this year] would be the highest since 2012," BCR's March 2017 Inflation Report projected.
Such increase is underpinned by the Executive's fiscal stimulus plan to boost greater government spending to reconstruct infrastructure damaged by heavy rains, floods and landslides lashing the country.
The document also projects a 0.3% rise in overall public spending this year, from 5.1% to 5.4%.
Reconstruction costs
BCR Governor Julio Velarde previously estimated reconstruction costs (bridges and paved highways) at around S/12.4 billion (around US$3.8 billion).
A total of 168 damaged bridges were recorded as at March 24. Unit cost for each structure ranges from S/40 to S/50 million (about US$12.3 to US$15.4 million), thus adding up to a S/8.4 billion (about US$2.6 billion) investment.
On the other hand, damages to 800 km of paved highways (average cost of S/50 million or US$15.4 million per km) would demand some S/4 billion (about US$1.2 billion).
"This [projection] is highly preliminary. It is very hard to tell; detailed engineering can provide more accurate data," he noted.
Velarde added Coastal El Niño weather pattern has destroyed 7,600 crop hectares and led to the collapse of 12,600 properties, affecting 131,000.
As for school casualties, damaged premises reach 1,100, whereas affected health care centers stand at 60.
Natural disasters have also left 106,000 victims (as at last Friday).
(END) MDV/JJN/DHT/MVB