Brazil pushes for fiscal austerity reforms

Record ID: 82946

  • Title: Brazil pushes for fiscal austerity reforms
  • Date: 7th October 2016
  • Summary: BRASILIA, BRAZIL (FILE) (REUTERS) EXTERIOR OF PRESIDENTIAL PALACE VARIOUS EXTERIORS OF NATIONAL CONGRESS
  • Embargoed: 22nd October 2016 19:07
  • Keywords: Michel Temer Henrique Meirelles public spending
  • Location: BRASILIA AND RECIFE AND RIO DE JANEIRO, BRAZIL
  • City: BRASILIA AND RECIFE AND RIO DE JANEIRO, BRAZIL
  • Country: Brazil
  • Topics: Government/Politics
  • Reuters ID: LVA004530BZGJ
  • Aspect Ratio: 16:9
  • Story Text: PLEASE NOTE: THIS EDIT CONTAINS MATERIAL THAT WAS ORIGINALLY 4:3
    A special committee of the Brazilian congress passed on Thursday (October 6) a proposed congressional amendment (PEC) limiting public spending.
    The amendment, known as PEC 241, will now go to the full House of Representatives for debate and two rounds of voting.
    Brazilian President Michel Temer said the vote was a good sign for Brazil's economy.
    "In that moment six parties ended the question with respect to the proposed amendment to the constitution that puts a cap on public spending. That is the most evident proof that the Brazilian legislature is conscious of the country's difficulties, not only the executive, not only government, but they are collaborating to get the country out of the crisis," he said.
    Finance Minister Henrique Meirelles said he is confident the reform will be passed later this year.
    "With the approval for the proposal that balances the public accounts we will overcome this moment and put Brazil back on the path of social justice with the true development," he added.
    The approval of fiscal austerity reforms in Congress would support the incipient recovery and shield the South American nation from global downturns, Meirelles said.
    Meirelles said the approval of the spending cap proposal in a congressional committee on Thursday (October 06) was a step in the right direction to rebalance the public accounts.
    Economist Vilma Pinto agreed that the proposal could benefit the economy.
    "If that PEC comes into force and we also have improvement in the economy at the same time, we are going to be able to visualize in the long term a stablization of the debt-GDP ratio. I believe that is important to improve the current situation of the country," she said.
    The vote came as Meirelles said that Brazil's economy is on track to pull out of its worst recession on record in the coming months despite a string of negative economic data this week.
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