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Brazil’s Lula to Decide on Fiscal Measures After Foreign Trips, Finance Minister Says
Lula’s economic team wants a rule that would turn temporary freezes into permanent cuts, after investors sold Brazilian assets and debt costs rose.
On Thursday, Finance Minister Dario Durigan discussed proposals to modify Brazil's fiscal framework, potentially turning temporary spending freezes into lasting reductions to the federal budget limit.
Rapidly rising mandatory spending pushed Brazil's gross debt to 82.9% of gross domestic product under President Luiz Inacio Lula da Silva's current term, prompting investor concern.
Finance Minister Durigan noted high interest rates are "very harmful to the economy," while Brazil's central bank held the Selic rate at 13.75%; the government froze R$13.65 billion earlier this year.
Following his overseas trips to Turkey and the Philippines, President Lula is expected to decide on fiscal measures; "We will keep debating and bringing forward proposals," Durigan said.
Economic officials aim to signal fiscal discipline soon so Congress can approve measures this year, as the government must deliver an effective surplus of at least R$8.5 billion for 2027.
The result of the presidential election is a paradox that no speech of victory explains. The government that presents itself as that of the poor funds itself to pay interest to the rich.