BRAZIL: Spending Limit Will Require Budget Cuts In 2018, Says Minister

(RTTNews) - Brazil's fiscal scenario for 2018 is still challenging, and the government will have to cut expenses to meet the spending limit set by law, said Brazilian Planning Minister Dyogo Oliveira at an event in Rio de Janeiro.

He said raising wages to public servants - something the government wanted to postpone - and the maintenance of tax relief to some sectors increased the planned expenses for this year and will require a contingency in expenditures.

"We are closing the numbers, we are going to have the partial compensation of the measures not approved by the collection, but some of those measures impacted the expenditure, and these are extrapolating the spending ceiling, so we will have to cut to fit the ceiling," he said.

The minister added that the contingency figures for 2018 should be released by the end of this week.

He also said that in 2018 the government would be able to comply with the so-called "golden rule" of public spending - which prevents the government from borrowing to finance current expenses - thanks to one-time events.

In 2019, however, the government will require about R$ 208 billion to fulfill the rule, and there are not so many alternatives to obtain extraordinary income.

"We will need different alternatives for 2019," Oliveira said.