Fourth Programmatic Fiscal Managment Development Policy Loan

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The Peru Fourth Programmatic Fiscal Management and Competitiveness Development Policy Loan for US$100 million is the last in a programmatic series of Fiscal Management and Competitiveness Development Policy Loans (FMCDPL). The FMCDPL series, along with parallel Development Policy Loans (DPLs) in the areas of social policy and environment, were designed in close partnership with Government of Peru (GoP) and in line with its policy program- as outlined in the Country Partnership Strategy (CPS). The development objective of the loan is to contribute to growth and poverty alleviation by supporting two main policy areas: (i) efficiency and quality of fiscal management and (ii) competitiveness. Peru entered the global crisis in a solid position and has managed its challenges well. Good macroeconomic fundamentals and appropriate policy responses to the crisis moderated the negative impact of weaker external demand and external shocks. Aware of the downside risks to economic growth as well to poverty and employment, the GoP implemented counter-cyclical policies to mitigate the impact of the crisis. Nonetheless, the GoP has not lost sight of the medium-term objectives of its reform agenda, and has continued to make progress in improving the effectiveness of fiscal management and supporting the country's competitiveness and integration into the global economy.