BRASILIA--Brazil announced budget cuts expected to total $8.4 billion a year as it reins in government spending at the start of another year with the economy in the doldrums.
President Dilma Rousseff, narrowly reelected in October, signed a decree limiting discretionary spending on travel, services and purchasing.
Brazil's planning ministry said the cuts would save 1.9 billion reais ($703 million) a month, or about $8.4 billion a year.
The Brazilian Congress, currently in recess, has yet to approve the 2015 budget.
"The government is sending a clear sign on budget cuts as a difficult year awaits and it is starting off by cutting spending to reduce risk," Jose de Lima Goncalves, chief economist with Fator Bank in Sao Paulo, told AFP.
"Under the new Rousseff government there will be a budgetary policy of restraint rather than the expansion of previous years," added Goncalves.
New Finance Minister Joaquim Levy is aiming for a surplus before debt servicing of $66 billion, or 1.2 percent of GDP, this year to restore market confidence.
Another measure Brasilia has announced to kick off a new era of relative austerity is tightening access to unemployment insurance.
The public accounts deteriorated in Rousseff's first term amid continued massive provision of social welfare programs which have lifted tens of millions of people out of poverty over the past decade.
Voters rewarded Rousseff by re-electing her to a second four year term, extending the ruling Workers Party's hold on power begun by her predecessor, two-term president Luiz Inacio Lula da Silva.
But whereas Lula enjoyed years of growth, peaking at 7.5 percent in 2010, the economy nosedived under Rousseff and growth for 2014 is set to come in at barely above zero with little improvement forecast for 2015.
Thursday also saw Brazil unveil a 3.2 percent fall in industrial production figures for January-November last year.
AFP
