Brazil’s economy ministry rejects Lula’s transition team’s assessment of finances | Bot To News

SAO PAULO, Dec 11 (Reuters) – Brazil’s economy ministry on Sunday rejected claims by President-elect Luis Inacio Lula da Silva’s transition team that the outgoing administration was leaving state finances “bankrupt”.

The economy ministry said in a statement that gross debt will reach 74% of GDP by the end of the year, with a primary surplus (excluding debt costs) of 23.4 billion reais, the first since 2013.

“This will be the first government to end its mandate with lower debts than at the beginning, in 2018 the debt was 75.3 percent of GDP,” the statement said.

Last week, the planning and budget group in Lula’s camp said President Jair Bolsonaro was leaving Brazil “bankrupt,” according to former minister and transition team member Aloizio Mercadante.

Brazil will pay $1.23 billion to international financial institutions next year, down 20% from the $1.56 billion it owed in 2016, the ministry said.

The government said that spending to help the most vulnerable sections of the population since the start of the COVID-19 pandemic prevented public sector raises until 2021.

Despite the ministry’s denial of fiscal problems, Senator Marcelo Castro, who is leading negotiations on the budget proposal, said there are no funds available to pay for various government programs next year.

Lula’s transition team is in talks to approve a bill that authorizes 145 billion reais in spending above the current legal ceiling.

Lula takes office on January 1. The former leftist president narrowly defeated Bolsonaro in a runoff election on October 30, a political comeback that ended Brazil’s most right-wing government in decades.

Reporting by Nayara Figueiredo, writing by Tatiana Bautzer; editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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