DATELINE BRASILIA: Brazil has adopted a temporary 10 per cent reduction in import tariffs on most of its foreign purchases to urgently address the accelerating inflation, the Foreign Affairs Ministry and Economy Ministry said in a joint memo.

The unilateral measure comes as members of the Southern Common Market (Mercosur) trade bloc, which groups Brazil, Argentina, Paraguay and Uruguay, are negotiating a similar measure, reports Xinhua news agency.

The measure will be valid until December 31, 2022 and apply to about 87 percent of imported products that carry a tariff, and could become permanent if a Mercosur agreement is reached in the coming months.

According to the memo, the decision is “justified by the emergency situation caused by the Covid-19 pandemic” and by the need of a tool to mitigate its “negative impact on the life and health of the Brazilian population”.

The Economy Ministry’s Foreign Trade Secretary Lucas Ferraz said the tariff reduction is expected to lower the pricing levels in Brazil by some 0.3 per cent over the long term (10 to 15 years).

The government also expects the measure to generate a cumulative increase of 246 billion reals ($45 billion) in GDP until 2040, and an increase of 139 billion reals in investment.