The General-Rapporteur on the 2009 Budget, Senator Delcídio Amaral (PT-MS), recognized on Tuesday (12/2), that the cutback defined in the bill should be higher than the R$8 billion that were initially forecast. The worsening of the effects of the international financial crisis in Brazil will force congresspeople to reduce government expenses for next year.

However, he didn’t want to forecast the amount of the cutback. R$8 billion refer to the income loss by the Union, which was estimated by the Executive in November, when the crisis was arriving in Brazil.

Amaral said that the budgeting consultants from the Congress have been working on decreasing expenses. They are “checking each project, each actual program”. He affirmed that their objective is to detect areas in which the government can decrease funding, and reserve the resources for investments.
“At this moment, Brazil needs to invest”, said the rapporteur.

Cutbacks at Vale
The senator’s declarations were made after the Company Vale do Rio Doce announced the dismissal of 1300 employees. Vale is the largest private exporting company in Brazil, with 7.9 billion exported in 2007. On Tuesday, the automaker Volvo announced the dismissal of 430 employees from their plant in Paraná. Delcídio Amaral affirmed that these events show that the impact of the financial crisis is merely arriving in Brazil.

“The situation will worsen when we get closer to March”, he affirmed, and said that he is in permanent touch with undertakers, to study the impact of the crisis in real economy in depth. Therefore, he believes the government will largely tighten its 2009 Budget, which is disclosed every year in February.

Report - Janary Júnior
Editing - Patricia Roedel
Translation - Positive