BRASILIA, July 16 (Reuters) – Brazilian Finance Minister
Guido Mantega will not attend the G20 ministers meeting in
Moscow this week because he is working on new freezes in public
spending, his office said on Tuesday.
Mantega has until Monday to decide with President Dilma
Rousseff on where to freeze billion of reais in budgeted
spending, a widely expected move that will signal that Brazil
remains committed to fiscal austerity.
The new spending freeze, which is expected to be in the
realm of 13 billion reais ($5.80 billion), is aimed at helping
the Rousseff administration meet its primary budget surplus
target of 2.3 percent of gross domestic product.
The budget tightening, which follows the freezing of 28
billion reais in spending in May, is also aimed at helping the
central bank battle inflation that hit 20-month highs in June.
Mantega met on Tuesday with Planning Minister Miriam
Belchior to look at spending items that will be frozen. Their
plan is to spare education and health following recent massive
protests against the poor quality of services in these areas.
After two years of aggressive spending, Rousseff is trying
to convince investors her administration will stick to the tough
fiscal rules that helped stabilize the economy of the South
American nation after decades of crises.
The leftist economist faces growing spending pressures
before next year’s presidential election and after a wave of
nationwide demonstrations in June in which thousands of
Brazilians demanded more investment in health and education.
($1 = 2.2398 reais)
(Reporting by Luciana Otoni; Editing by Peter Cooney)
