WRAPUP 1-Brazil vows fiscal discipline as revenues fall

Mon Apr 27, 2009 11:47pm BST
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By Walter Brandimarte

NEW YORK, April 27 (Reuters) - Brazil's government will see a 6 percent decline in revenues this year, but will not relax its grip on fiscal accounts even as the country heads into presidential elections in 2010, two top ministers of President Luiz Inacio Lula da Silva said on Monday.

Finance Minister Guido Mantega and Planning Minister Paulo Bernardo assured investors in New York that Latin America's largest economy will be able to implement further counter-cyclical monetary policy without compromising fiscal responsibility.

"In 2010, during elections, our goal is to keep seeking vigorous fiscal results," Mantega told an investor conference organized by the Brazilian-American Chamber of Commerce in New York.

Mantega also said it is too early to measure the swine flu outbreak on the Brazilian economy. He added that the economy likely will slow down in the first half of the year but will recover in the second half ending the year with modest positive growth.

He stressed that the government will be able to resume reducing the size of its public debt as a portion of the total economy in 2010, after a brief increase in the debt-to-GDP ratio this year.

Speaking at the same conference, minister Paulo Bernardo noted that Brazil maintained its fiscal discipline during President Lula's re-election campaign in 2006.

"There is no reason to believe that we will loosen our fiscal accounts in 2010 because of the elections," he said, adding that government revenues are already recovering.

Government revenues have fallen by 16 percent during the first two months of the year and by 9 percent in March, compared with the same period a year ago, as a result of the economic slowdown and recent tax cuts adopted by the government to support the economy.  Continued...

 
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