World Economy

Brazil to Announce Budget Cuts

Brazil to Announce Budget CutsBrazil to Announce Budget Cuts

Brazilian President Dilma Rousseff’s new, still unconfirmed economic team is preparing budget cuts for 2015 that will be announced next week, a report said.

The report did not give an amount for the proposed cuts. Citing an unnamed aide to the president, it said that the measures would be unveiled along with the names of Rousseff’s new finance minister and other cabinet members, Reuters reported Sunday.

Three of the country’s leading newspapers reported on Friday that Rousseff will appoint Joaquim Levy, head of the asset management arm of Brazil’s second-largest private bank Bradesco SA, in a bid to regain investor confidence and revive economic growth.

A government official told Reuters Levy was highly likely to be finance minister. Other sources said the new ministers would be announced on Wednesday. The presidential palace has declined to comment on speculation over the names of the new ministers.

Another leading paper, Estado de S. Paulo, reported on Sunday that Rousseff is facing opposition from within her leftist Worker’s Party over University of Chicago-trained economist Levy.

The paper said the confirmations, which were expected last week, were delayed in order to give Congress time to pass a law allowing the country to miss its 2014 primary surplus target and give the new economic team a fresh start.

A sharp deterioration of Brazil’s finances under Rousseff has put the once-booming economy in the sights of rating agencies and eroded investor confidence in the country.

The government plans to deduct 106 billion reais ($42.4 billion), or 2.15 percent of gross domestic product off the target, according to a planning ministry report published on Friday. It needs Congress to pass the bill making the goal more flexible for the new target to become official.