Brazil’s Government to Announce Cuts in Spending

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The government in Brazil is expected to start announcing measures today (Friday, September 11th), to cut expenses so that it may reduce the deficit forecast for the 2016 budget, said Senate leader Delcidio Amaral. Last week the government of President Dilma Rousseff sent to government the 2016 budget bill that forecast a deficit of R$30 billion.

“Starting [Friday] the government will already start to announce the first administrative decisions,” said Amaral to reporters. “The government will work in reducing its structure, reducing spending of its ministries and revising service contracts,” added the Senate leader.

According to Amaral a series of measures to reduce government spending will be announced during the next few weeks. The official said that the administration’s economic team is discussing which ministries will be extinguished and which government programs and forecast investments will have to be revised or scrapped all together.

“President Rousseff is being very careful, not publicizing what she will do so she won’t have to back down later,” said Amaral, noting that the divergences appearing in the media among the government cabinet members and leaders have already hindered several actions that the government had planned. “She (Rousseff) is taking extreme care to make a competent adjustment in the structure of the ministries. This requires political negotiations,” he added.

As hinted by Finance Minister Joaquim Levy on Thursday, during a press conference in Brasilia, Senator Amaral reiterated that the government will propose new ‘transitory’ sources of revenues so as to balance next year’s budget. The new revenues should include the increase of taxes.

On Thursday, Minister Levy said that he was confident that the Brazilian population would understand the increase of taxes if it meant a stronger, healthier economy. Levy however said that all measures were still being discussed and no decision had yet been made in the fiscal front.