Brazil Cuts $18.5 Billion From Budget as Downgrade Looms

Brazil will cut 44 billion reais ($18.5 billion) from this year’s budget, as policy makers seek to rein in inflation and shore up fiscal management that has sparked warnings of a rating downgrade. Swap rates fell.

The cuts will allow Brazil to meet a primary surplus target of 1.9 percent of gross domestic product, the Finance Ministry said in a statement distributed in Brasilia today. The budget is based on estimates the economy will grow 2.5 percent this year and inflation will slow to 5.3 percent.