Brasília – The target for Brazil’s primary surplus – i.e. savings for paying interest on government debt – will be equivalent to 1.2% of the Gross Domestic Product (GDP) next year. The announcement was made by the next Brazilian minister of Finance, Joaquim Levy.
The primary surplus enables lower medium- and long-term government indebtedness levels. According to the new minister, in 2016 and 2017 the Brazilian government will commit to a fiscal target of at least 2% of GDP. According to him, a primary surplus of at least 2% is needed if the net debt-to-GDP ratio is to keep declining. However, Levy conceded that a fiscal effort of this magnitude cannot be reached next year.
“Meeting these [primary surplus] targets is key in increasing confidence on the Brazilian economy. This allows the country to consolidate its economic growth and improve the social achievements we had in the past 20 years,” he explained.
President Dilma Rousseff’s new economic team was announced this Thursday afternoon (27th) by the minister of the Presidency’s Secretariat for Communication, Thomas Traumann, at government seat Palácio do Planalto. In an official statement, the president thanked the current ministers, who will remain in their positions until their newly appointed successors form their teams. Besides Levy, Nelson Barbosa has been announced for the Ministry of Planning, and Alexandre Tombini will remain in his position as Central Bank governor.
*Translated by Gabriel Pomerancblum
