LatinNews Regional Monitor: Brazil & Southern Cone - 15 April 2020

* The Brazilian government led by President Jair Bolsonaro has presented the federal congress with a formal request for authorisation to fund current expenses of R$343.6bn (US$66.43bn) through debt. This figure represents the government’s mandatory expenses as outlined in the 2020 budget. Under a law known as the ‘golden rule’, the government is constitutionally banned from issuing debt to fund current spending. It can only circumvent this rule with supplementary or special credits taken out for a specific purpose, once they have been approved in both chambers of the federal congress. In light of the extra costs generated by the coronavirus (Covid-19) pandemic, congress approved the declaration of a state of calamity on 20 March, valid until 31 December, which allows the federal government to exceed its fiscal deficit target and disregard a constitutional spending cap, but does not relax the golden rule.

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