LIMA, Aug 9 (Reuters) – Peru’s finance minister, Pedro Francke, told Reuters on Monday that the new leftist government can increase mining taxes to fund public spending without affecting private-sector competitiveness, all while reducing the fiscal deficit.
Peru, the world’s No. 2 copper producer, is highly dependent on mining taxes and new President Pedro Castillo has promised to deliver more social programs to lift the country’s poor.
The election of Castillo, a member of a Marxist-Leninist party, as president in June has spooked investors, with Peru’s Sol currency falling to a fresh record low against the dollar on Monday.
Francke, a moderate left-wing economist who has worked for the World Bank, told Reuters in an interview that the government is working to regain investor confidence.
He said the administration is committed to maintaining fiscal discipline and will reduce the deficit in 2022 by 1 percentage point compared with 2021.