Finance Minister Warns: Brazil Will Stay the Course

    "I am certain that economic policy will not change in direction, because it is on the right path, and President Lula will not hazard any kind of risk in an election year," Brazil’s Minister of Finance, Antonio Palocci, said before the Brazilian Congress.

    Palocci went to Congress for a testimony before the Chamber of Deputies’ Finance and Taxation Commission. He reaffirmed the need to maintain "rigorous fiscal control" as a way for the machinery of government to contain current expenditures.

    Fiscal control, Palocci remarked, is an essential prerequisite for the country to proceed in reducing the ratio between net government debt and the Gross Domestic Product (GDP).

    A ratio that has dropped from 57% to 51.5% in the last three years, "which is no little matter," he pointed out, even though the debt continues to lay claim on over half of what the nation produces.

    He emphasized, nevertheless, that this reduction "is a very salutary point for the country, and it permits the Central Bank to lower the government’s benchmark interest rate (Selic)."

    ABr

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