Brazil finance minister says fiscal reforms will calm investors, central bank

BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad on Tuesday said that the government’s new fiscal rules and a tax reform should calm investors and the central bank and that there is consensus on the urgency of approving both.

After a closed-door meeting with government officials, congressional and business leaders, Haddad told reporters he expects both houses of Congress to approve the new fiscal rules during the first half of this year, while only the lower house will likely vote on the tax reform during that time frame.

The fiscal rules would replace a more rigid cap on spending that limits growth in expenditures to the previous year’s inflation rate. The tax reform aims to simplify the tax code though details remain murky.

“This will give a great deal of tranquility to investors, to the monetary authority, and ministers so that they will be able to work for the well-being of the country,” he said.

Haddad lauded the discussion around both issues. He said his ministry is comfortable with the dialogue so far with lawmakers over the spending issues.

Brazil’s proposed fiscal framework bill is set to be voted by the lower house between Tuesday and Wednesday after discussions with party leaders, Speaker Arthur Lira said after the meeting.

Claudio Cajado, the lawmaker in charge of the bill in the lower house, has previously proposed to toughen the fiscal rules.

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