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LatinNews Daily - 21 October 2021

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In brief: Government could break spending cap, says Brazil’s Guedes

* Brazil’s Economy Minister Paulo Guedes has said that the government may exceed the constitutionally-mandated spending cap in order to fund a new social programme. The ‘Auxílio Brasil’ programme, unveiled in August as a successor to the ‘Bolsa Família’ conditional cash transfer programme, aims to provide low-income Brazilians with a R$400 (US$71.5) monthly benefit, according to President Jair Bolsonaro (although it is due to be implemented from November, the finer details of Auxílio Brasil are yet to be confirmed). While dismissing concerns that the new benefit is a populist measure and seeking to reassure that the government remains committed to fiscal austerity, Guedes acknowledged in comments during a virtual event that the spending cap may have to be bypassed to launch the programme. “As we want this protection layer for the more vulnerable, we will ask that it comes with a waiver [of the spending cap], to mitigate the [coronavirus] pandemic’s socio-economic impact”, Guedes said, then suggesting the excess expenditure would be around R$30bn.