Brazil's Temer reveals plan to curb gov't spending

Brazil's interim President Michel Temer Tuesday floated new fiscal measures to curb government spending as part of efforts to close the country's near-record public deficit.

Calling on the Congress to approve his proposal, Temer said this is "the first test" of his government which faces the staggering public debt now accounting for 67 percent of Brazil's GDP.

He proposed a cap on the country's primary deficit of 170.5 billion reals (47.7 billion U.S. dollars) for 2016, which if true, would be Brazil's worst deficit ever.

The proposed figure would also far outstrip that planned by suspended president Dilma Rousseff, who set a target of 96.6 billion reais (27.1 billion U.S. dollars).

Temer said that congressional backing for his proposal would show that the country is returning to "a joint governance." However, he anticipated that opponents "will seek to interrupt our work to avoid a vote" on the proposals.

"Public sector costs are on an unsustainable trajectory. We are condemning future generations to facing extraordinary difficulties," he said.

In the proposal, Temer suggested tapping into the country's sovereign fund, created by the government of former president Luiz Inacio Lula da Silva (2003-2010) to host oil revenues, to close the budget gap.

Other measures including reclaiming 100 million reais (28 million U.S. dollars) injected in February into the Brazilian Development Bank.

According to Temer, the government aims to limit the growth of the primary deficit in 2016 to below 2015 inflation levels.

"These measures will allow the country to reduce risk, grow more confident and reduce interest rates," he added. (1 U.S. dollar = 3.55 Brazilian reais) Enditem