Brazil appeals to sovereign fund and state companies’ profits to meet 2012 fiscal target
Brazil tapped into its sovereign wealth fund and state companies’ profits in an effort to meet its 2012 fiscal target.
The Treasury will withdraw 8.85 billion Reais (4.3 billion dollars) from its sovereign wealth fund and 4.7 billion Reais in dividends from state-owned bank Caixa Economica Federal, according to a Dec. 31 decision published in the official gazette.
President Dilma Rousseff administration last year cut taxes and stepped up public works spending as it struggled to revive an economy that the central bank estimates expanded by 1%.
Tax breaks reduced federal revenue by 45 billion Reais last year, according to Finance Minister Guido Mantega.
Brazil targeted in 2012 a budget primary surplus (before interest payments), of 139.8 billion Reais, about 3.1% of GDP.
In the first 11 months of the year, the primary surplus was 82.7 billion Reais, or 69% of the goal.
As part of the efforts to meet the goal, the Treasury is also authorized to discount 25.6 billion Reais in infrastructure spending from its target.