🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Brazilian ministers pledge measures to strengthen fiscal framework

Published 10/30/2024, 11:51 AM
Updated 10/30/2024, 11:57 AM

SAO PAULO (Reuters) - Brazilian ministers on Wednesday pledged to strengthen the country's fiscal framework, trying to ease market concerns as they prepared to debate how to proceed with a fiscal adjustment that is expected to include spending cuts.

Market participants have questioned Brazil's ability to maintain its fiscal framework, as mandatory expenses have been rising at a rapid pace, squeezing out room for other spending under a rule that limits overall expenditure growth.

Finance Minister Fernando Haddad told reporters that a constitutional amendment would be needed for the government to strengthen the fiscal framework, adding that negotiations with other cabinet members on the topic were advancing.

He said there was an "important convergence" with President Luiz Inacio Lula da Silva's chief of staff when it comes to the measures, but noted there was still a "writing challenge" as the leftist Lula government prepares them.

Once the government finds the right formula to make the fiscal framework sustainable over time, Haddad added, market fears surrounding public spending will recede.

"Our job is making the best proposal possible in the direction of making spending fit" within the fiscal rules adopted last year, the minister said, without providing further details.

Haddad made the remarks ahead of a meeting of the government's budget board later on Wednesday.

The board includes Haddad, Chief of Staff Rui Costa, Planning Minister Simone Tebet and Management Minister Esther Dweck, who lead the debate on proposals that must be presented to Congress.

"Anyone who bets against Brazil will lose. Lula will make the necessary adjustments to maintain the country's growth, ensure investments and comply with the fiscal framework, bringing expenses within the rules," Costa wrote on X.

According to two government sources close to the discussions, the ministers are expected to debate fiscal adjustment initiatives at Wednesday's meeting.

Tebet told reporters that Lula already had "an idea" of what fiscal measures will be needed, but said she could not disclose the size of any proposal, as the president has a "final say" and has not yet given a green light on the options presented.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.