Brazil Congress passes 2008 budget guidelines

SAO PAULO, July 12 (Reuters) - Brazil's Congress approved late on Wednesday the 2008 budget guidelines bill, giving the government more room to boost spending as the economy expands at a faster pace.

The vote only took place after Senate President Renan Calheiros, under investigation for graft, agreed to stay out of the joint session. Opposition lawmakers threatened to block passage of the guidelines if Calheiros, who normally presides over joint congressional sessions, was present during the vote.

The proposed guidelines were first sent to Congress in April and encompassed keeping the primary budget surplus target for the 2008-2010 period at 3.8 percent of gross domestic product.

The primary budget surplus, which excludes interest payments, is closely followed by analysts and investors as a gauge of the government's ability to service its debt.

The guidelines also envisaged GDP growth of 5 percent a year for the three-year period and increased the volume in a government investment plan in 2008 to 13.8 billion reais from 12.4 billion reais now.

The guidelines bill, which was passed with some amendments, now has to be signed into law by President Luiz Inacio Lula da Silva.