July 17, 2013 / 1:27 AM / 4 years ago

Brazil's Mantega to miss G20 summit to focus on budget freeze

BRASILIA (Reuters) - Brazilian Finance Minister Guido Mantega will not attend the G20 ministers meeting in Moscow this week because he is working on new freezes in public spending, his office said on Tuesday.

Mantega has until Monday to decide with President Dilma Rousseff on where to freeze billion of reais in budgeted spending, a widely expected move that will signal that Brazil remains committed to fiscal austerity.

The new spending freeze, which is expected to be in the realm of 13 billion reais $5.80 billion (3.8 billion pounds), is aimed at helping the Rousseff administration meet its primary budget surplus target of 2.3 percent of gross domestic product.

The budget tightening, which follows the freezing of 28 billion reais in spending in May, is also aimed at helping the central bank battle inflation that hit 20-month highs in June.

Mantega met on Tuesday with Planning Minister Miriam Belchior to look at spending items that will be frozen. Their plan is to spare education and health following recent massive protests against the poor quality of services in these areas.

After two years of aggressive spending, Rousseff is trying to convince investors her administration will stick to the tough fiscal rules that helped stabilize the economy of the South American nation after decades of crises.

The leftist economist faces growing spending pressures before next year's presidential election and after a wave of nationwide demonstrations in June in which thousands of Brazilians demanded more investment in health and education.

Reporting by Luciana Otoni; Editing by Peter Cooney

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