April 4, 2018 / 8:30 PM / 7 months ago

Peru's new finance minister eyes cuts to 'superfluous' spending

FILE PHOTO: Peru's President Martin Vizcarra and new Finance Minister David Tuesta wave during the swearing-in ceremony at the government palace in Lima, Peru April 2, 2018. REUTERS/Guadalupe Pardo

LIMA (Reuters) - Peru’s new finance minister said on Wednesday that he would work to cut “superfluous” government spending and increase investment in infrastructure to support underperforming economic growth.

David Tuesta also promised “cautious” changes to the tax system in a bid to raise collection that has slumped in recent years, but offered no details.

“We have to open up fiscal space with a rapid restructuring of state spending, cutting current spending focused on superfluous spending ... to create resources for investment,” Tuesta told a news conference. “We have a lot of luxuries that we shouldn’t have in a developing country.”

Tuesta was sworn in as part of President Martin Vizcarra’s first cabinet this week, taking the reins of an economy that has been hit by a political crisis that culminated in former President Pedro Pablo Kuczynski resigning last month.

A former BBVA economist and director for Latin America’s CAF development bank, Tuesta said public investments would have a “multiplier effect” on economic growth.

Tuesta added that he would try to keep to the previous government’s economic growth target of 4 percent for 2018 but that he hoped to raise annual growth to 5 percent in following years.

Reporting by Teresa Cespedes; Writing by Mitra Taj; Editing by Peter Cooney and Rosalba O'Brien

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