MercoPress. South Atlantic News Agency
Brazil freezes budget outlays in an effort to meet its primary surplus target
Brazil has frozen 28 billion Reais (approx 13.7 billion dollars) in its 2013 budget as it tries to meet its primary surplus target, Finance Minister Guido Mantega said on Thursday in Brasilia. President Dilma Rousseff’s administration is trying to meet targeted primary surplus goal of 155.9 billion Reais without undermining economic growth. Read full article
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Disclaimer & comment rulesI wonder how much all the giveaways to the cane sugar industry for ethanol production, the subsidies to Uncle Tom Cobley and all have added up to?
May 23rd, 2013 - 09:14 pm - Link - Report abuse 0Any guesses because Matenga won’t know “The Brazilian government has extended tax cuts and increased spending to spur the economy, even as such measures have helped keep annual inflation near the 6.5% upper limit of the central bank’s target range.” And this is a surprise?
I have been told that Dilma does not favour the usual way of running an economy. OK that is her decision, but could she put some thought into WHAT they should do because Mantega is incapable of doing so and it is one of the reasons International Investment Companies are keeping their money elsewhere.
It amazes me that the Finance Minister is always shocked when the money that is given in subsidies and or tax breaks IS SPENT! Just what else are people going to do with it. Even investment in plant and machinery is inflationary if it is additional money.
Chris,
May 23rd, 2013 - 10:40 pm - Link - Report abuse 02011 - IED = 65 billions USD
2012 - IED = 66 billion USD
IED is the true money - fixed investment
Prime rate 2011 - 12,75%
Prime rate 2012 - 7,25%
Brasil spending less money=123,9 billions USD/Year
Our market is strong, workers have money to buy (cars, houses, services, etc)
2 Brasileiro
May 24th, 2013 - 01:12 pm - Link - Report abuse 0Thank you for those figures, but they back up my concerns. Please look at my final paragraph: the people have more money to spend because the government is subsidizing auto makers and the loans to buy them are cheaper -this means MORE money in the economy as a result.
Now it seems that people spending this money (and who can blame them?) is an utter surprise to the government!
There is an old saying in the UK: “you cannot have your cake and eat it” which is just what this finance 'programme' is doing. I am not saying this is wrong but I am amazed that no-one saw it coming. :o)
@3 Surely you have to agree that Brazil is showing a certain amount of intelligence. It has discovered that there are things that it cannot afford. Unlike argieland, its response is to decide not to spend the money. Isn't that intelligence and consideration? Whereas, in argieland, they would go ahead and spend the money and then try to figure out who to steal it from.
May 24th, 2013 - 02:38 pm - Link - Report abuse 04 Conqueror
May 24th, 2013 - 07:50 pm - Link - Report abuse 0It would most certainly be the case if it were not for the fact that in order to prevent a downturn (not to expand forever) money has given away in billions and billions via tax break and subsidies, TAXPAYERS MONEY which should have been used to pay for what it now realises it is short of money for!
It's like our personal spreadsheet budget. We use our budget to determine what costs have been (2011 & 2012: we have the bills) and we use that to estimate (with a high level of accuracy so far) what our costs WILL be for 2013.
We can then estimate how much ‘free’ or unallocated money we have from our income and decide what to do with it.
Brasil has a major problem though and that is the huge size of the place and the complexity it brings to its budgets. However this is not helped by the lies that Mantega has consistently told about ‘growth’ and therefore encouraged inward investment and the numbers NEVER materialised. This is unforgiveable and hugely damaging to Brasil. No investor can afford to take the risk now unless there are serious changes in the hierarchy managing the countries financial management. Unfortunately there has only been one and he was the one who understood what was going on and decided, because of Dilma supporting the liar that he could no longer stay and has put in his resignation. He was the DEPUTY to the liar.
In my judgement, having considered publically available information Dilma should have replaced Matega with his deputy. Failing to do this has also sent the wrong message to international investors: the very ones that Dilma has rightly said are needed to pay for the entire infrastructure that Brasil needs to become a world player. It is said she dislikes western economics; so far the economics she is using to join the Big Boys have demonstrably not worked. She needs to make her mind up one way or another.
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