Brazil Fiscal Plan to Stabilize Debt Welcomed by Markets
- Lula’s team plans small but growing primary fiscal surpluses
- Plan relies on revenue growth, requires congress approval
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Brazil is proposing small but growing primary budget surpluses as part of a much-awaited fiscal plan whose success largely depends on an expansion of public revenue — either through growth or higher taxes.
Investors cautiously welcomed the proposal, which sets targets for fiscal surpluses before interest payments that will need to be approved by congress. The Brazilian real gained 0.8%, the benchmark Ibovespa equity index rose 1.9% and most swap rates fell.