Brazil’s Budget Impasse Drags On Amid Lula’s Concerns Over Social Impact
- Spending cut talks are still ongoing inside government
- Increasing fears over fiscal deficits have weighed on assets
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Brazil’s announcement of much-awaited spending cut measures is on hold amid President Luiz Inacio Lula da Silva’s indecision over the impact on social programs, adding to investors’ concerns about the country’s fiscal outlook.
Closed-door discussions between different ministries and Lula have failed to yield much progress so far. The president has several proposals to cut spending on the table but is hesitant to carry out a plan that would impact the poor, and is still mulling which social programs could face reductions to help balance the budget, according to people with knowledge of the matter.