Brazil fiscal framework to include rule to track spending, says Haddad

BRASILIA (Reuters) – Brazil’s finance chief said the government’s eagerly awaited fiscal framework would include a new rule to monitor spending but without addressing public debt, in remarks on Friday ahead of unveiling the rules backed by President Luiz Inacio Lula da Silva.

In an interview with CNN Brasil, Finance Minister Fernando Haddad stressed that investors need a long-term horizon to commit to projects in the country.

“The fiscal framework will offer this,” he said, reiterating that the proposal would be unveiled later this month.

The fiscal framework is a set of budget guidelines designed to balance government revenue and expenditures.

Haddad said public debt needs to be monitored, but that a debt target is unworkable because it would cause constraints to what he described as the “harmonization” of government spending policies and borrowing costs set by the central bank.

The rules follow Lula’s securing of congressional approval for a multi-billion reais spending package that bypasses a constitutional spending cap, in line with one of the leftist leader’s campaign promises.

On Thursday, Brazil’s planning and budget minister, Simone Tebet, said that the new fiscal rules will address concerns to eliminate the budget deficit, stabilize public debt, and include investments backed by Lula that promote economic growth.

(Reporting by Isabel Versiani; Editing by Sarah Morland and Diane Craft)