LatinNews Daily - 24 May 2023

In brief: Brazil’s fiscal framework bill clears initial hurdle

* The lower house of Brazil’s congress has approved the base text of the government’s proposed fiscal framework bill, a major boost for the government led by President Luiz Inácio Lula da Silva in its efforts to appease investors with new objectives and limits on government spending. First announced at the end of March and recently revised, the bill will limit the government’s spending increases to 70% of revenue growth. It will also set a target for 2024 to eliminate the primary fiscal deficit and to attain a primary budget surplus for 2025 and 2026. Another provision of the bill would oblige the government to increase spending by only 50% of the previous year’s revenue increase, if it misses its target in the previous year. The base text was approved by 372 votes in favour and 108 against. Today (24 May) there will be a vote on some proposed amendments to the draft legislation before the bill moves on for a vote in the senate.

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