Peru First Fiscal Policy and Sustainable Growth DPF-DDO

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The development objective of the First Fiscal Policy and Sustainable Growth Development Policy Financing - Deferred Drawdown Option (DPF-DDO) for Peru is to support Government reforms to: (a) strengthen fiscal management, and (b) foster a more productive and greener economy. It advances development areas that are prioritized in the Peru Country Partnership Framework (CPF) objectives and the Systematic Country Diagnostic (SCD) update high level outcomes (HLOs). Reforms supported by this operation benefit from broad policy consensus, are aligned with the government’s strategic plans and help advance Peru’s Organization for Economic Co-operation and Development (OECD) accession. This DPF-DDO complements the World Bank Group’s (WBG) ongoing and pipeline program of investment projects, particularly in innovation. Finally, in the context of high uncertainty and financial market volatility, the authorities value the DDO instrument as an important part of their debt management strategy and a hedge against increasing global interest rates and international capital markets’ volatility, and climate shocks.