Congress approves basic text of 2016 Budget

After a two-hour debate, the National Congress floor approved Thursday (Dec. 17) afternoon the basic text of the 2016 Budget. The proposal of Deputy Ricardo Barros, responsible for the report, forecast a 1.9% reduction in GDP (the sum of the wealth produced in the country) and official inflation of 6.47% by the Broad National Consumer Price Index (IPCA). The average SELIC key interest rate stood at 13.99% per year, below the current level of 14.25% per year.

Congress still has to vote on the changes proposed by the congressmen. The first change intends to cut about $6.15 billion to be collected by the Provisional Tax on Financial Transactions (CPMF)—which has not been approved yet—from the estimated budget revenue. According to the opposition, the budget cannot rely on a tax that does not exist yet.

During the discussions of the basic text, government lawmakers praised the decision to keep $7.21 billion on the budget for the Bolsa Família program next year. It was possible to maintain the conditional cash transfer program in the budget after the Congress passed the budget guidelines bill (LDO) reducing the primary surplus target from $11.2 billion to $7.8 billion.

The LDO provides for the parameters and estimates that guide the budget plan, and after approved by the Congress floor, it moves on for President Dilma Rousseff's sanction.

Translated by Amarílis Anchieta