Reflections on the fiscal and economic state of Peru in August 2023.

August 29 is a day that brings with it a series of reflections and analyses regarding the state of the Peruvian economy, especially in the context of fiscal decisions and exchange rate fluctuations that have marked the course of recent years. At this point in the year, significant movements have been recorded in the business sphere that have had a direct impact on the country's fiscal coffers. The recent sale of two companies has significantly contributed to the State's finances, which could be a relief for a fiscal system facing persistent challenges. One of the most debated topics currently is the Temporary Tax on Net Assets (ITAN), a measure that is at the center of political and economic debate. Despite the questions it has raised, the Government has decided to move forward with a project that seeks to exempt the collection of ITAN for those taxpayers who are exempted, although its implementation is not expected until 2015. This decision has been subject to criticism, as it is believed that the delayed implementation could limit its effectiveness in a context where tax collection has shown signs of weakness. In July, tax collection experienced a decline, raising concerns about the Government's ability to finance its programs. However, the emergence of unexpected fiscal revenues has opened a window of opportunity to reverse this decline and stabilize public finances. The current situation raises questions about the sustainability of these unexpected revenues and whether they will be sufficient to counteract the deficiencies observed in the previous months. Meanwhile, the Peruvian economy is facing additional pressure due to the volatility of the exchange rate, particularly the acceleration of the US dollar. This month of August has witnessed a significant increase in the North American currency, which rose from S/ 3.305 to S/ 3.402, marking its largest monthly increase in six years. This rise has been driven by the intensification of the trade war and geopolitical tensions, creating an environment of uncertainty in the markets. Economic analysts warn that the upward pressure of the dollar could continue in September, which could have additional repercussions on inflation and the purchasing power of citizens. The uncertainty caused by negative external events has led the markets into a state of nervousness, resulting in greater exchange rate volatility and added complexity for economic policy decisions. In this context, discussions have begun regarding Peru's economy for 2024, which is based on the factor of "rebound." Economic performance is expected to improve due to a weaker base, resulting from the decline observed in the first half of 2023. However, there are conflicting positions regarding private investment in the country. While some economists are optimistic and foresee an improvement in investor confidence, others are cautious and warn about the risks that could hinder this growth. The economic scenario in Peru is, therefore, a reflection of a series of interconnected factors that affect both fiscal policy and monetary stability. The combination of government decisions, the evolution of the exchange rate, and investment dynamics will be crucial in defining the country's direction in the coming months. The need for effective fiscal policies and a proactive approach to private investment is more pressing than ever. As we await the implementation of measures that will impact the ITAN and the market's response to dollar volatility, it is vital that both the Government and economic actors maintain clear and effective communication. Confidence in the fiscal system and the national currency is fundamental to addressing the challenges ahead and ensuring sustained growth in the future. In conclusion, August 29 represents an opportunity to reflect on how political and economic decisions influence the well-being of Peruvians. With an economy seeking to recover from recent challenges, it is imperative that all sectors collaborate to build a more stable environment that promotes development and prosperity in the country. The focus is on the future, and only time will tell if the measures taken today will be effective in ensuring a better tomorrow.