Brazil Finance Minister Proposes Higher Primary Surplus Targets

Finance Minister Dario Durigan announced that the Brazilian government will pursue a higher effective primary surplus for next year to stabilize the economy. The move follows a market selloff triggered by the re-election of President Luiz Inacio Lula da Silva.

Durigan intends to submit legislation to Congress this year that would require policymakers to formally target the midpoint of the primary balance goal. To meet these fiscal targets, the Finance Minister outlined a plan to review public sector salaries, special pension regimes, and the size of budget earmarks allocated for Congress.

In addition to these spending reviews, Durigan stated that the central bank will intervene in the foreign exchange market if necessary to maintain stability.