Peru's tariffs will fall again starting next year and the average levy on imports will decline to 3.4 percent from 5 percent, the finance ministry said on Friday. The measure will help limit pressure on inflation, which is already mild and running about 2 percent a year, and help improve the competitiveness of manufacturers by giving them access to cheaper machinery, the ministry said.
Peru's economy is expected to grow about 6 percent next year after estimated expansion of 9 percent this year. The World Bank's Doing Business report ranked Peru this year as the most amenable place to set up shop in South America, a sign its reforms have gone deeper than its regional peers.
The Andean country has been trimming import duties for over a decade and by July of next year 95 percent of its foreign trade will be generated by countries with which it has free-trade deals, the ministry said. The latest reduction could help offset impacts from a sharp rise in global food prices that many economists see as an inflation rise for next year. It could also help curb appreciation pressure on the local currency, the sol, which has gained more than 3 percent against the US dollar this year.
The sol's gains have paled next to most Latin American currencies. Peru's central bank often seeks to limit volatility in the market because about half of the country's bank deposits are in dollars. Under the new rules, sugar, some other food items, and minerals will enter tariff-free. Tariffs will also be reduced by varying amounts for pharmaceuticals, light vehicles, agriculture and electronics. The new rules lower tariffs on more than 3,400 types of goods, the finance ministry said.
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