MercoPress. South Atlantic News Agency

Brazilian executive order to further cut budget spending

The Central Bank said on Monday that Brazil posted a primary budget deficit of 20 billion reais (about $5.24 billion) in the January-October period.

Brazilian government said in an executive order published Monday in the Official Daily that it was cutting spending by an additional 11 billion reais ($2.82 billion) this year. The move is part of an effort by the government to a budget deficit target of 1 percent of the gross domestic product, a goal agreed to during the last budget review.

 Economists, however, say the goal is out of reach even with the additional spending cuts.

The cuts will affect current spending in many areas in December since the government will postpone paying for different services, including water and electricity, until next year.

The Central Bank, meanwhile, said Monday that Brazil posted a primary budget deficit of 20 billion reais (about $5.24 billion) in the January-October period.

The deficit during the first 10 months of this year was larger than in the same period last year, when the figure came in at 11.6 billion reais (about $3.04 billion).

The primary budget deficit, which excludes interest payments on the public debt, was 11.5 billion reais (nearly $3.02 billion) in October, marking the worst performance for the tenth month of a year in 13 years.

On a year-on-year basis through Oct. 31, the primary budget deficit totaled 40.9 billion reais (nearly $10.72 billion), or 0.71% of GDP.

Brazil's economy is headed for its worst economic performance since 1990, when it contracted by 4.35%. Latin America's largest economy is in recession, with GDP contracting for two consecutive quarters.