Kelly Oliveira, Daniel Lima and Pedro Pedruzzi Reporters Agência Brasil
Brasília – Minister of Finance, Guido Mantega, announced yesterday that the government will raise its primary surplus target from R$81.8 billion to R$91 billion. Mantega made the announcement following a meeting of the Political Council, which brought together the leaders of allied political parties in Congress. In his comments, Mantega emphasized that the bigger primary surplus will not mean more spending cuts [in February the government announced budget cuts of R$50 billion].
For some time the government has been signaling changes in fiscal policy. Last week, for example, the secretary of the National Treasury (“Tesouro Nacional”), Arno Augustin, pointed out that a strong fiscal adjustment policy would eventually make it possible (“abrir um espaço interessante”) for a reduction in interest rates [note: Brazil’a benchmark interest rate, the Selic, is 12.50% per year (making Brazil the country with the highest real interest rate in the world); coincidentally, the Copom (Monetary Policy Committee) that sets the Selic, begins a two-day meeting today].
In his comments last week, Augustin pointed out that the cumulative “consolidated public sector” primary surplus for the seven-month period from January to July, reached R$91.9 billion, compared to R$43.6 billion during the same period last year.
Augustin went on to declare that because there was a crisis and everyone had to make a sacrifice, the government will not give civil servants any pay raises either this year or in 2012. “Fortunately, the principal categories are in line and balanced, with compatible salaries,” he said.
Also, last week, Mantega told a Senate commission that the government has reduced its GDP growth forecast from 4.5% to 4%.
Allen Bennett – translator/editor The News in English
Link - Meta de superávit primário do Governo Central este ano aumenta para cerca de R$ 91 bilhões
Link - Aumento da meta de superávit primário abre espaço para redução de juros, diz Mantega
