Economics
Pandemic Spending Pressure Puts Brazil Fiscal Rule at Risk
- ‘No doubt’ new aid will breach spending cap, senator says
- Investors see rule as sign of Brazil’s commitment to austerity
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Brazil looks set to break a key fiscal rule to provide another round of financial aid to the poor as lawmakers pile pressure on President Jair Bolsonaro to act fast during a second wave of Covid-19.
Economy Minister Paulo Guedes has tried to protect the so-called spending cap rule by proposing an emergency constitutional amendment that would allow the government to reduce mandatory spending in other areas -- a process that would require lengthy negotiations with congress. Legislators, meanwhile, are pushing to quickly resume the payments, which ran out in December, as the pandemic roars back.