Brazil Finance Minister Mantega Proposes 2015 Budget: Daily

By Chesney Hearst, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – On Thursday, August 28th, Brazilian government officials delivered the 2015 Brazilian budget draft, the Projeto de Lei Orçamentária Anual (PLOA) 2015, to Congress. Betting on economic improvements in Brazil and internationally during 2015, the proposal forecasts a three percent growth of Brazilian Gross Domestic Product (GDP), inflation of five percent, and a targeted primary surplus of R$114.7 billion during the upcoming year.

The budget proposal also included a fixed R$788.06 minimum wage increase for next year and a reduction in government spending on Petrobras. The government’s investment in Petrobras will decrease from R$84.5 billion this year to R$83.4 billion in 2015.

Minister of Planning, Miriam Belchior downplayed the R$1.1 billion drop, citing ongoing projects without need of additional funding. She told reporters during a press conference held on Thursday; “It is a small reduction. But there were questions about pre-salt investments and several investments are being completed.”

Finance Minister Guido Mantega, who also attended the press conference, said of the budget proposal; “We are working towards an estimated GDP of three percent and a minimum wage of R$788.06, with inflation at five percent.”

While, many economists’ forecasts differ for Brazil in 2015, Mantega explained the government’s optimistic outlook by saying; “There will be change of scenery, in which economic problems this year will not be repeated in 2015.”

Mantega cited the drought, which his says adversely affected both energy and food prices, and turbulence within the United State Federal Reserve (FED), due to U.S. stimulus policies, as problems Brazil would not face in 2015. Additionally, Mantega said that with the Word Cup over, there will be an increase in both production and consumption in the country.

“It will probably rain a lot in 2015 and you complain about the rain, not the drought,” Mantega told reporters, adding; “International growth will improve, I’m not the only one predicting it. Also [without the World Cup], there will by more productive days and less inflationary pressure.”

The budget proposal now awaits approval from Congress. It must be voted on and approved before December 22nd. If approved, will be implemented by to the next government, whether it is run by current President Dilma Rousseff, whose popularity is on the decline, according to recent polls, or by one of her opponents, Marina Silva from the PSB (Socialist Party) or Aecio Neves of the PSDB (Social Democracy Party).

Read more (in Portuguese).

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