BRASILIA, July 24 (Reuters) – Brazil’s central bank must
remain vigilant if it is to cut inflation in half to meet its
official target next year, bank director Luiz Pereira said on
Friday, signaling more rate hikes as markets fear the government
is loosening its policy of fiscal austerity.
Pereira’s comments came two days after President Dilma
Rousseff shocked markets with a dramatic reduction of the
government’s fiscal savings targets for 2015, 2016 and 2017,
following a continued drop in tax revenues.
BRASILIA (Reuters) – Brazil dramatically lowered its fiscal savings goals for 2015 and 2016 on Wednesday due to plunging tax revenues, and announced new spending cuts to underscore its commitment to austerity amid a steep economic downturn.
The government cut its primary surplus goal for this year to 8.7 billion reais ($2.70 billion), or 0.15 percent of gross domestic product, from 66.3 billion reais, the equivalent of 1.1 percent of GDP, originally budgeted.
BRASILIA, July 22 (Reuters) – Brazil’s largest party, the
PMDB, will back the reduction of the government’s fiscal savings
target and ultimately approve austerity measures despite
political tensions, an influential senator told Reuters on
Senator Romero Juca, a PMDB leader in the upper house, said
he “applauds” President Dilma Rousseff’s decision to slash the
key target to rebuild credibility.
BRASILIA, July 22 (Reuters) – Brazil’s government will
provide incentives for over 29,000 companies to use about 860
billion reais ($267 billion) worth of tax credits to settle
existing tax debts, in the latest effort by President Dilma
Rousseff to raise more revenues and cut a ballooning budget
Under the program, unveiled in a decree on Wednesday,
companies will be allowed to use tax credits related to
non-operational losses to trim part of their overdue tax bills.
Firms joining the program must pay a minimum 43 percent of their
debt in cash.
BRASILIA (Reuters) – The Brazilian government will slash its key fiscal surplus goal for the year as tax revenues sink, but plans to unveil fresh spending cuts to show its commitment to austerity, two officials familiar with the decision told Reuters early on Wednesday.
The reduction of the targeted primary surplus of 66.3 billion reais ($20.89 billion) or the equivalent to 1.1 percent of gross domestic product will be announced later on Wednesday, the officials said. Reducing the closely-watched goal shows just how difficult it will be for President Dilma Rousseff to shore up the country’s finances after years of excesses and amid a painful economic downturn.
BRASILIA, July 21 (Reuters) – Brazil’s Federal Audit Court
will not speed up the settlement of billions of reais worth of
overdue payments that have dragged on for years, a court judge
told Reuters on Tuesday, easing pressure on President Dilma
Rousseff as she struggles to shore up public finances.
Augusto Nardes, a judge at the court known as TCU, is
leading the review of Rousseff’s accounting of federal
government spending last year in a controversial process that
opposition leaders say could pave the way for her impeachment.
BRASILIA, July 21 (Reuters) – Brazil may cut spending
further to strengthen its finances due to a sharp drop in tax
revenues, Finance Minister Joaquim Levy said on Tuesday without
ruling out the possibility of lowering the government’s key
budget surplus target.
With markets leery of the government adjusting its closely
watched goal of a primary budget surplus of 1.1 percent of gross
domestic product, Levy took a break from government talks on the
matter to assure investors that austerity is here to stay even
if the target is changed.
SAO PAULO/BRASILIA (Reuters) – Brazil’s government needs an additional 500 billion reais ($157 billion) from taxpayers over the next 15 years to put public finances and the national debt on a sustainable path, a private study showed, underscoring the challenge facing a economy grappling with a high tax burden and stagnation.
Spending commitments in education, social security and healthcare that the government assumed after the global financial crisis are adding the equivalent of 0.4 percent of gross domestic product a year to the budget, according to the paper by economists Mansueto Almeida, Marcos Lisboa and Samuel Pessoa.
BRASILIA, July 10 (Reuters) – Brazil raised the rate of
return on new highway concessions and will do the same for other
infrastructure projects to woo much-needed investment into the
sluggish economy, a senior government official said on Friday.
The government hiked the rate of return for highways to 9.2
percent from a previous 7.2 percent, marking a change in stance
by President Dilma Rousseff, who has been criticized for scaring
off investors with below-market rates of return.
SAO PAULO/BRASILIA, July 1 (Reuters) – A “substantial” drop
in inflation expectations in Brazil shows that monetary policy
is yielding results, central bank president Alexandre Tombini
said on Wednesday, sounding more upbeat about policymakers’
progress in fighting stubbornly high prices.
In a speech to business executives in São Paulo, Tombini
reiterated the bank will remain vigilant to bring the inflation
rate back to the 4.5 percent target by late 2016, and
guaranteeing “its stability for coming years.”