Brazil’s Finance Minister, Fernando Haddad, announced Monday that remaining obstacles to a long-awaited fiscal package, intended to reduce mandatory government expenses, have been addressed. However, President Luiz Inacio Lula da Silva has requested additional budget cuts, extending the package to another ministry.
Brazilian Currency Pressured Amid Fiscal Uncertainty
In recent weeks, Brazil’s currency, the real, has reached multi-year lows against the U.S. dollar as markets await a fiscal package announcement aimed at curbing Brazil’s growing mandatory spending. Despite pressure, the government has delayed the package, leaving investors uncertain about Brazil’s economic direction.
Updates on the Fiscal Package and Timeline
Speaking to journalists in Brasilia, Haddad refrained from setting a specific date for the announcement of the fiscal measures but confirmed that last week’s unresolved issues have now been settled. However, Lula has now requested that cuts include one additional, unnamed ministry, with discussions potentially concluding by Wednesday.
According to government sources, Lula and his chief of staff recently held meetings with leaders from over 10 ministries, including Health, Education, and Pensions, to finalize the package details.
Progress Towards Legislative Approval
The government had previously stated that the fiscal package would be presented after Brazil’s municipal elections in late October. While a timeline for its release remains uncertain, Haddad indicated that recent discussions were aimed at ensuring the package is “understandable and acceptable” for the public.
He plans to meet with Lula on Tuesday to discuss presenting the measures to the heads of the Lower House and Senate, expressing optimism that the fiscal package could be approved by Congress within the year.
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