The government’s budget for 2016 was presented to Congress on 26 November by Prime Minister Pedro Cateriano and members of his cabinet. This envisages a 6% increase in overall government spending, with central government spending rising by 9%, regional government spending falling by 0.5% and municipal expenditure (by provinces and districts) down by 6.3%. Much of the increase in central government spending will be directed to education, which is to receive 18% of total spending in 2016. The education ministry hopes to be able to provide for an increase in teachers’ pay.

Alonso Segura, the minister of economy and finance, described the budget as ‘austere’. The MEF has reduced its projection for growth in 2015 to 2.8%. Segura said that the prospects for 2016 are subject to a number of downward pressures, including a fall in Chinese demand for minerals, an upward move in US interest rates and the likely impact of the El Niño weather phenomenon in the first part of the year.

According to central bank figures, the economy grew by 2.6% in the first three quarters of this year when compared to the same period of 2014. In the third quarter it grew by 2.9% over the same quarter in 2014, with mining leading the way with 8.7% (as a result of new projects coming on stream). Exports in the third quarter totalled US$5.8 billion compared to US$7.4 a year earlier. The current account deficit in the third quarter was equivalent to 4.9% of GDP.l