INTERVIEW-Brazil gov't poised for more budget cuts
Reuters, Wednesday, January 06, 1999 at 18:19
BRASILIA, Jan 6 (Reuters) - Brazil's government will slash
spending in January beyond the amount set forth in an earlier
series of budget cuts to ensure it meets fiscal targets agreed
with the International Monetary Fund, a senior official said
Wednesday.
A meeting of the government's Fiscal Management and Control
Committee scheduled for Thursday will approve a proposal to
restrict federal spending this month, Pedro Parente, the
Finance Ministry's executive secretary, told Reuters.
"We want to make it absolutely clear that we will honor the
fiscal program as announced..." said Parente, who is also head
of the committee.
Rather than spend 8.25 percent of the annual federal budget
in January -- a normal percentage -- the government would spend
just 5 percent to compensate for delays in introducing new tax
revenues, Parente said in an interview.
"This is not a definitive cut, it is a temporary cut..."
Parente said, explaining that spending later in the year might
be increased to balance out the lean times in January.
Brazil agreed to save or cut $23.5 billion in 1999 to
narrow in return for a $41 billion package of loans put
together by the International Monetary Fund in November.
But delays in approving a controversial financial
transaction tax, one of the package's most important items,
plus other revenue-raising measures have caused concern in
financial markets about the government's ability to meet its
fiscal target.
william.schomberg@reuters.com))
Copyright 1999, Reuters News Service
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