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BRAZIL: LULA SAYS IMF PACT WON'T HURT SOCIAL PROJECTS.
by Mario Osava
RIO DE JANEIRO, Feb. 10 (IPS) -- The austerity plans of Brazil's new government, stricter than those imposed on the previous administration by the International Monetary Fund (IMF), will not affect social programs, President Luiz Inacio Lula da Silva pledged at a Cabinet meeting on Monday.
Brazil's economic officials decided to boost the primary surplus goal for this year -- the difference between non-finance public income and spending -- to 4.25 percent of gross domestic product (GDP).
The agreement that the government of Fernando Henrique Cardoso (1995-2003) signed in September with the IMF for a $30 billion loan set the surplus goal at 3.75 percent.
The increase announced by the Lula administration is an attempt to keep the public debt at December levels, or just below 56 percent of GDP, with sights on neutralising the effects of the 2002 financial crisis, including currency devaluation and increased interest rates.
The budget drafted by the previous administration and approved in December by Congress "underestimated spending by $2.5 billion," presidential spokesman Andre Singer reported.
As such, the budget cuts for this year will have to total $3.9 billion, according to the figures presented to the Cabinet by Guido Mantega, Budget and Planning minister.