Brazil’s Congress Approves New 2015 Fiscal Target

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – After weeks of uncertainty, Brazil’s Congress finally approved a bill to change the government’s fiscal target, which is now a deficit of R$119.9 billion for 2015. According to Brazil’s Planning, Budget and Administration Minister, Nelson Barbosa, the approval solves ‘once and for all’ the issue of government loans still not paid to public banks.

“The target includes a clause that allows the government to pay off liabilities, determined by the TCU (Federal Accounts Court),” said Barbosa. “With this (approval) pre-programmed discretionary expenditures will be paid.”

For Finance Minister, Joaquim Levy the challenge now is to take care of the country’s economy next year so that the government will be able to comply with the primary surplus target of 0.7 percent of the country’s GDP.

Now Levy says the Congress must approve next year’s budget. In August Ministers Barbosa and Levi presented Congress with a bill which forecast a primary deficit of R$30.5 billion for 2016.

This is the second year that the Rousseff government has gone to Congress and asked for a revision of its fiscal target. On November 30th, the federal government in Brazil announced a freeze on all spending except earmarked expenditures, for the last month of the year due to the lack of revenues.

If the bill had not been approved, items such as air travel, accommodations of federal employees on business trips and even water, electricity and telephone bills for many of the federal agencies would not have been paid.