Analysis: Vowing Budget Control, Brazil Faces Pressure to Keep Spending

Investors balked at the prospect of more heavy spending after the government chalked up record deficits and debt last year, and pushed the real down 2.8% against the dollar in late week trading.

RIO DE JANEIRO, BRAZIL - (Reuters) Brazil’s government entered 2021 determined to slash last year’s record budget deficit, but a devastating second wave of COVID-19 and fragile economic growth are piling the political pressure on President Bolsonaro to keep spending.

Lawmakers seeking to become the next leaders of both houses of Congress have told Reuters they understand the importance of restoring public finances back to health, but are looking for ways to protect growth and Brazil’s poor from the pandemic.

Senator Rodrigo Pacheco (DEM-MG), front-runner in the race to lead the upper house, said on . . .

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