Brazil's Fiscal Plan Ready Tuesday, Unveiling Date Unknown
Dow Jones Newswires
SAO PAULO -- Brazil's economic authorities on Tuesday will present
President Fernando Henrique Cardoso with a broad fiscal austerity
proposal, but government ministries won't confirm when the measures will
be made public.
"The measures now being discussed are due to be presented to President
Cardoso (Tuesday)," said Finance Ministry spokesman Joao Arnolfo
Carvalho, adding that the public announcement of the plan is at the
president's discretion.
A presidential palace spokeswoman also said that Cardoso will receive
the proposal Tuesday, but that the measures won't be divulged until he
fully evaluates them.
Shortly after being reelected two weeks ago, President Cardoso pledged
to attack the country's burgeoning public deficit - at around 7% of gross
domestic product - through the implementation of a multi-year fiscal
adjustment plan.
The government hopes to generate next year a primary surplus - current
revenue minus current expenses - of between 2.5% and 3% of GDP, or
around $28 billion.
Government sources in recent weeks have hinted that the measures would
be unveiled around Oct. 20, but local market sources have said that their
release isn't likely until after state elections are decided on Oct. 25.
"There's a lot of political pressure from government- supporting candidates
to delay the announcement until after the elections," said Antonio Lacerda,
chief economist with Siemens AG in Brazil.
Lacerda said that austerity measures could jeopardize the chances of
candidates allied with President Cardoso in key states, such as Rio
Grande do Sul, Minas Gerais and Sao Paulo. "The opposition could use
the recession that the measures will produce as a political instrument," he
added. |
