Brazil Freezes $2.7 Billion From Budget With Lula’s Blessing
- Amount is insufficient to eliminate primary fiscal deficit
- Lula had said he had to be convinced of need to freeze budget
Luiz Inacio Lula da Silva
Photographer: Arthur Menescal/BloombergThis article is for subscribers only.
Brazil will freeze 15 billion reais ($2.7 billion) in spending from this year’s budget to comply with its fiscal target, providing some relief to investors who feared President Luiz Inacio Lula da Silva wouldn’t sign off on the measure.
Finance Minister Fernando Haddad announced the decision on Thursday after a meeting with Lula and Planning Minister Simone Tebet, among other cabinet members. It will ensure that this year’s primary deficit, which doesn’t take into account interest payments, will remain within the range of tolerance of 0.25% of gross domestic product set in the fiscal rule, Haddad told reporters after the meeting.