Brazil’s government on Friday ordered the first budget freeze of 2018, amounting to R$16.2 billion and affecting most federal government ministries. The Planning Ministry, in a statement, described the freeze as “preventative,” noting that Congress has still not acted on certain taxation measures for 2018 while a postponement of salary hikes for federal employees is still being adjudicated in the courts. Meanwhile, the planned privatization of electric power utilities holding company Eletrobras is still being review by the federal courts. If congressional and court actions favor the government, the freeze is likely to be reversed. Brazil’s government is committed to a public-sector deficit in 2018 of no more than R$163 billion. The government’s 2017 performance surprised most economists wh en the public sector reported a deficit of only R$110.5 billion. Last year’s target was also R$163 billion.
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