June 5, 2018 / 8:47 PM / a year ago

Peru's Vizcarra says will name new finance minister Tuesday or Wednesday

LIMA (Reuters) - Peru’s President Martin Vizcarra said on Tuesday he would appoint a new finance minister later in the day or on Wednesday, and is considering three people, including the ministry’s current Cabinet chief, Jose Arista.

Peru's President Martin Vizcarra speaks to foreign media during a news conference at the Government Palace in Lima, Peru June 5, 2018. REUTERS/Mariana Bazo

Speaking to foreign media in a news conference, Vizcarra said that his government’s core economic policy had not changed despite the resignation of outgoing finance minister David Tuesta.

With a little more than two months in office, Tuesta lasted less time at the helm of the finance ministry than any of his three predecessors in the past year - dealing a blow to Vizcarra’s bid to end the uncertainty that roiled Peru before taking office to replace former President Pedro Pablo Kuczynski, who stepped down in a graft scandal in March.

Vizcarra did not directly answer questions about why Tuesta resigned, but signalled it was related to Tuesta’s recent decision to hike excise tax rates on diesel and other fuels.

The higher taxes were introduced as crude prices were climbing on global markets and prompted scattered protests in southern Peru led by truck and bus drivers that had threatened to expand to other regions this week.

“From the 20 or 30 measures and economic decisions in the government, maybe we agreed on all of them except one, which is just what led to the minister’s resignation,” Vizcarra said. “But that doesn’t conceptually change the economic policy we’ve been implementing.”

Tuesta could not be reached for comment.

The country’s new finance minister will decide whether or not to reverse the new excise tax rates, Vizcarra added.

Arista, an economist, briefly served as agriculture minister in Kuczynski’s government and had been a deputy minister under Luis Carranza, who was finance minister during the 2006-2011 term of then-President Alan Garcia.

Vizcarra, who had been Kuczynski’s vice president, said the government would continue to focus on bolstering economic growth by developing infrastructure and promoting private investment.

“Today more than ever we’re convinced we must reactivate the economy. We need private investment. We need to mobilise the public sector to reactivate public investment - not necessarily by raising tax rates,” Vizcarra said.

But the local business association Confiep warned that the high rate of turnover of finance ministers in Peru - the world’s No.2 copper producer and one of Latin America’s most stable economies - was becoming worrisome.

“These changes of ministers don’t favour governability or the environment for investing,” Confiep President Roque Benavides said on local broadcaster RPP.

Reporting By Mitra Taj, Teresa Cespedes and Marco Aquino; editing by Chizu Nomiyama, David Gregorio and Jonathan Oatis

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