Brazil’s Rousseff to cut key fiscal goal against Levy’s warning

Lissandra Paraguassu & Alonso Soto – Reuters, 12/15/2015

Dec 15 Brazil’s President Dilma Rousseff will cut a key fiscal savings goal for next year to safeguard an iconic welfare program, a senior lawmaker with knowledge of the matter said on Tuesday, a move that could raise tensions in her economic team.

Congressman Ricardo Teobaldo said the government asked him to alter the budget guidelines bill to reduce the 2016 primary surplus goal to 0.5 percent of the gross domestic product (GDP) from 0.7 percent.

The target measures the balance of government revenues versus spending excluding debt servicing payments, and is considered a key measure of debt sustainability and fiscal health.

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