The increase in holidays in Peru: celebration or economic risk?

In recent years, Peru has seen a notable increase in the number of holidays, which has sparked intense debate about their economic implications. Holidays, on one hand, are essential for commemorating historical events and providing workers with the opportunity to rest. However, the recent trend of increasing these holidays has raised serious concerns about their negative impact on the national economy. Since 2020, Congress has enacted four new mandatory holidays: July 23, in honor of the Peruvian Air Force; June 7, for Flag Day; August 6, commemorating the Battle of Junín; and December 9, in memory of the Battle of Ayacucho. This accumulation of holidays, combined with the 30 vacation days to which formal workers are entitled, has resulted in a total of 46 days without work per year, representing a significant increase in the time that employees must be paid without providing services. This phenomenon highlights an alarming imbalance between the need to commemorate and celebrate and the economic reality of the country. With nearly 70% of workers in the informal sector, the burden of the new holidays primarily falls on the few formal companies that must bear the costs of this measure. While the formal sector is forced to pay for idle time, informal workers face even greater obstacles in accessing formal employment, perpetuating the cycle of labor informality in the country. Economic analysts warn that the interruption of productive activities affects not only businesses but also the economy as a whole. According to Apoyo Consultoría, each new holiday can lead to a decrease of 0.7 percentage points in monthly Gross Domestic Product (GDP) growth. Annually, this translates into a loss of up to S/2,000 million in revenue, seriously impacting vital sectors such as construction, manufacturing, and services. Although some argue that holidays can promote tourism and related activities, the benefits are insufficient to offset the losses incurred in other sectors. Reductions in instructional hours for students, in health services, and in the overall productivity of the country are consequences that should not be underestimated. The economy comes to a standstill, along with the progress and development that Peru desperately needs. Moreover, the problem is exacerbated in a context of low labor productivity and significant competitiveness gaps. According to the Ministry of Economy and Finance, productivity per hour worked in Peru is less than half that of countries like Chile and Argentina. In this sense, the new holidays seem to reinforce a negative cycle in which less work leads to less production, discouraging investments in a country that already faces significant challenges in its economic environment. The accumulation of these holidays thus presents an example of legislative populism that ignores economic analysis and available evidence. Legislators, in their eagerness to grant days of rest without considering the implications, legislate in an uninformed manner. With each new holiday, the country’s competitiveness is compromised, putting the economic well-being of millions of Peruvians at risk. What is needed is a balanced approach that considers both the desire to commemorate and the urgent need to work and generate wealth. Instead of continuing to increase the number of holidays, it would be wiser to evaluate how these decisions impact the economy and the daily lives of citizens. The future of the Peruvian economy depends on informed and responsible decisions that promote development and job creation. As we continue down this path of increasing holidays, it is critical that society and the business sector raise their voices and demand a thorough analysis of the consequences of these policies, to prevent the legacy of this legislative management from becoming an unsustainable burden for the country.