Brazil's government is spending more to help the economy recover, but that spending isn't contributing to push up inflation, Finance Minister Guido Mantega said Wednesday.
"We have an anti-cyclical policy, which means the government can increase investments to stimulate the economy and help growth reach around 3% or 4%," Mr. Mantega said during a press conference in the capital, Brasilia, to discuss adjustments to this year's budget.
"This isn't inflationary. There is no inflationary action from the government." The minister said that the drivers of inflation are the prices of food and services, which he said aren't related to government spending.
"Even during a global crisis, Brazil continues to have a solid fiscal policy and its surplus is larger than in other countries," Mr. Mantega said. The government on Wednesday said it has cut its forecast for economic growth this year to 3.5%, from the 4.5% laid down in the 2013 budget law.
Inflation is seen at 5.2% this year, up from the previous forecast of 4.9%. The Brazilian currency is seen slightly stronger, at BRL2.00 per dollar, from the previous BRL2.03.
The government has also frozen 28 billion Brazilian reais ($13.7 billion) in spending from this year's budget, largely a result of weaker-than-expected economic growth.
The government said it's expecting a shortfall of BRL47.5 billion in revenue this year, compared with the original budget law. In a statement, the planning ministry said it would cut BRL5 billion in obligatory spending and BRL23 billion in discretionary spending.
"The backdrop of the international crisis led the government to adopt measures to stimulate the economy which, at this point, have led to a reduction in revenues and an increase in spending," the ministry said.
The budget freeze won't affect the government's priorities, including education, health and infrastructure investments, Planning Minister Miriam Belchior said.
According to Planning Ministry data, the ministries of Cities and Defense bore the largest cuts in spending. The ministers said that budget earmarks for individual lawmakers have been cut to around BRL7 billion from around BRL22 billion.
Mr. Mantega said that in order to meet its target for savings this year, the government may deduct up to BRL45 billion in investments and tax breaks, up from the original estimate of BRL25 billion.
The government has maintained the goal for the primary surplus--government savings before interest payments on debt--at BRL108.1 billion for the year, equivalent to 3.1% of gross domestic product.
nasdaq.com
"We have an anti-cyclical policy, which means the government can increase investments to stimulate the economy and help growth reach around 3% or 4%," Mr. Mantega said during a press conference in the capital, Brasilia, to discuss adjustments to this year's budget.
"This isn't inflationary. There is no inflationary action from the government." The minister said that the drivers of inflation are the prices of food and services, which he said aren't related to government spending.
"Even during a global crisis, Brazil continues to have a solid fiscal policy and its surplus is larger than in other countries," Mr. Mantega said. The government on Wednesday said it has cut its forecast for economic growth this year to 3.5%, from the 4.5% laid down in the 2013 budget law.
Inflation is seen at 5.2% this year, up from the previous forecast of 4.9%. The Brazilian currency is seen slightly stronger, at BRL2.00 per dollar, from the previous BRL2.03.
The government has also frozen 28 billion Brazilian reais ($13.7 billion) in spending from this year's budget, largely a result of weaker-than-expected economic growth.
The government said it's expecting a shortfall of BRL47.5 billion in revenue this year, compared with the original budget law. In a statement, the planning ministry said it would cut BRL5 billion in obligatory spending and BRL23 billion in discretionary spending.
"The backdrop of the international crisis led the government to adopt measures to stimulate the economy which, at this point, have led to a reduction in revenues and an increase in spending," the ministry said.
The budget freeze won't affect the government's priorities, including education, health and infrastructure investments, Planning Minister Miriam Belchior said.
According to Planning Ministry data, the ministries of Cities and Defense bore the largest cuts in spending. The ministers said that budget earmarks for individual lawmakers have been cut to around BRL7 billion from around BRL22 billion.
Mr. Mantega said that in order to meet its target for savings this year, the government may deduct up to BRL45 billion in investments and tax breaks, up from the original estimate of BRL25 billion.
The government has maintained the goal for the primary surplus--government savings before interest payments on debt--at BRL108.1 billion for the year, equivalent to 3.1% of gross domestic product.
nasdaq.com
No comments:
Post a Comment