Brazil to freeze $860 million in 2024 spending, nears fiscal package announcement

BRASILIA (Reuters) – Brazil’s Finance Minister said on Thursday that government will freeze $860 million in 2024 spending and maintain its yearly primary deficit goal, adding that a fiscal package with budget cuts for the next years could be announced as soon as Monday.

Speaking with journalists in Brasilia, minister Fernando Haddad said this year revenues have been performing as expected, but government will need to block or freeze some 5 billion reais ($859.9 million) in spending.

Brazilian government has until Friday to release a bi-monthly revenue and expenditure report with updates on its budget outlook for this year.

Haddad said the government will not change its primary deficit target for this year, which mandates zero deficit excluding interest payments, with a tolerance margin of 0.25 percentage points of GDP in either direction.

The minister also said that government would be ready to announce a fiscal package with broad spending cut measures for the next years as of Monday, when he will attend an internal meeting to finalize the plan.

Expectations for more details on the fiscal package impact have been driving Brazil’s assets in recent weeks, as investors await to see if the measures would be enough to end their worries on government’s ability to comply with its fiscal framework.

($1 = 5.8144 reais)