Peru’s Ministerio de Economía y Finanzas (MEF) is proposing a financial boost to its fiscal space to quell potential unrest among public sector unions. The ministry is updating its fiscal envelope to S/676 million, aiming to soothe demands for increased salaries among approximately 1.08 million public workers. Meanwhile, the unions have marked their calendars for national strikes on June 23-24, aiming to push for even more substantial fiscal opportunities.
Boosting fiscal space: The numbers
The proposed S/676 million marks a significant increase from the previously stated S/300 million in May. Despite these developments, union representatives argue that the MEF’s latest proposition is still insufficient. They contend that the proposed increments achieve only modest wage increases, sometimes amounting to single-digit soles.
With an impressive 60% real-term increase in Peru’s public wage bill over the past decade, as highlighted by the International Monetary Fund (IMF), the nation’s fiscal flexibility is strained. Unions, represented by the Confederación Intersectorial de Trabajadores Estatales del Perú (CITE), demand “a real, sufficient and dignified fiscal space,” citing the necessity to fairly reward state workers.
