Brazil's government today announced nearly $32 billion in spending cuts to its 2012 budget but said social programs and major investments for the 2014 World Cup and 2016 summer Olympics would not be affected.
The cuts aim to ensure that Brazil can meet its target of a budget surplus of $81 billion.
"We have made a big cut of 55 billion reals (nearly $32 billion)" in budget expenditures, Finance Minister Guido Mantega said. "The increase in investment is the engine of growth in Brazil," added Mantega, who also insisted that "social programmes would be strengthened."
Today's cuts are higher than the $30 billion slashed last year just after President Dilma Rousseff took office.
For 2012, the government is banking on 5% GDP growth, to be fueled by tax rebates, industry incentives as well a cut in interest rates, in addition to an increase in the minimum wage on January 1 to the equivalent of $332 per month from $294.
Brazil registered zero GDP growth in the third quarter of 2011 compared to the second quarter, official statistics showed. The Brazilian Institute of Geography and Statistics reported in early December that the economy had grown just 3.7% in the last 12 months.
