Brazil drastically reduces primary surplus target

The Brazilian government Wednesday announced the decision to drastically reduce the primary surplus target for 2015.

The primary surplus was reduced from the original 66.3 billion reals (20.5 billion U.S. dollars) to 8.747 billion reals (2.71 billion dollars), the equivalent of 1.19 percent of GDP reduced to 0.15 percent.

The recession of the economy which led to a decrease in federal tax income motivated the government to make this decision with clear strategy, said Finance Minister Joaquim Levy.

"Our goal is to reduce the uncertainty in Brazilian economy with a safer and more reachable primary surplus target, which will help direct the decisions of economic agents, such as business people, workers and families," said Minister Levy.

Lowering the primary surplus target will not lead to changes in governmental fiscal discipline, he said.

In addition to the new primary surplus target, the government announced a cut of 8.6 billion reals (2.66 billion dollars) in federal budget, bringing the total cuts to 79.4 billion reals (24.62 billion dollars) with the major one announced at the beginning of the year. Endi