August 22, 2017 / 7:13 PM / 10 months ago

Brazil predicts approval for fiscal targets on Aug. 29 after budget compromise

BRASILIA (Reuters) - Brazil’s government expects Congress to approve its new fiscal targets on Aug. 29 after reaching an agreement with legislators to rescind some presidential vetoes to a budget law, a government coalition leader in Congress said on Tuesday.

Brazil's President Michel Temer (L) and Finance Minister Henrique Meirelles attend a ceremony in Brasilia, Brazil August 10, 2017. REUTERS/Adriano Machado

President Michel Temer vetoed 67 parts of the 2018 budgetary guidelines bill earlier this month, angering lawmakers who will be responsible for approving the softer budget targets and an ambitious agenda of economic reforms later this year.

The compromise illustrates Temer’s efforts to keep his coalition united in Congress after blocking corruption charges against him earlier this month and ahead of next year’s general elections. Temer’s approval ratings are near record lows.

However, the congressional budget committee’s official schedule for approving the budget targets predicts a vote by Sept. 19. The committee will meet later on Tuesday with Planning Minister Dyogo Oliveira to discuss the budget agenda.

Temer has initially agreed to undo seven of the vetoes, Congressional leader André Moura told journalists after a meeting with Oliveira, Finance Minister Henrique Meirelles and fellow congressmen. The government plans to send a bill with the revised vetoes by Thursday, said Moura, who is a deputy for the Social Christian Party in Brazil’s lower house of Congress.

The vetoes had not affected the main budget guidelines and economic forecasts but limited legislators’ leeway for requesting public investments in their constituencies. Brazil has struggled to reduce a gaping budget deficit after two years of deep recession, and softened its 2017 and 2018 budget targets last week to avoid breaking its fiscal responsibility law.

The new primary deficit targets for this year and next are 159 billion reais ($49.7 billion), up from 139 billion reais for 2017 and 129 billion reais for 2018.

Reporting by Silvio Cascione; Editing by Phil Berlowitz

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