Brazil announces $6.65bn spending cut

Brazil said Friday it will immediately cut government spending by $6.65 billion to balance the budget and achieve the goal of a primary fiscal surplus of 2.3 percent of GDP. "Initially, the cut will amount to $15 billion reals ($6.65 billion at the current exchange rate), but we will see during the year if new cuts are needed," Finance Minister Guido Mantega told Globo television. The announcement was meant to reassure financial markets by signaling that Brasilia can maintain fiscal discipline. "The important thing is to meet the target of 2.3 percent. This target will be met whatever the cost," Mantega said. The fiscal surplus corresponds to savings in public spending aimed at paying interest on the debt. The cuts will be outlined in detail next week, said Mantega, who added that they will not affect "operating costs, investment and the government's social programs." Brazil, which has seen two years of weak economic growth and rising inflation, was rocked by weeks of mass protests last month as citizens demanded better public services and an end to rampant corruption.