Cusco authorities face reduced investment and rising debt

Authorities elected in October will inherit a financial landscape in Cusco characterized by reduced investment resources and increased debt obligations. According to an analysis by economist Erick Chuquitapa Rojas, the combined budget for the Cusco Regional Government and its 116 municipalities is projected to drop from S/7,023.6 million approved for 2026 to a proposed S/6,580.8 million for 2027, representing a 6.3% decrease.

The reduction is most significant in capital expenditure, which is expected to fall by S/685 million, or 22.2%. Specifically, the Regional Government's capital spending is projected to decrease by 45.3%, while municipal capital spending will drop by 12.2%. Conversely, municipal debt service is expected to rise by 82.2%.

For the Cusco Regional Government, the proposed 2027 budget is S/3,221.6 million, an 8.5% reduction from the 2026 level. While current expenditure is expected to increase by 3.7%, capital expenditure will fall by 45.3%, and debt service will grow by 63.2%. This shift means current expenditure will rise from 72.3% to 81.9% of the regional budget, while capital expenditure will decline from 26.4% to 15.8%.