Rousseff Says Brazil’s Budget Cuts to Be as Small as Possible

Rousseff Says Brazil’s Budget Cuts to Be as Small as Possible

Government aims to boost primary surplus to 1.2% of GDP

By

PAULO TREVISANI/WSJ

May 19, 2015 2:05 p.m. ET

BRASÍLIA—Brazil’s government, which is trying to improve its financial situation, will avoid excessive reductions to the national budget, President Dilma Rousseff said Tuesday.

“We will make the necessary cuts,” she said to reporters at the Presidential Palace after signing trade agreements with Chinese Prime Minister Li Keqiang.

Ms. Rousseff has been meeting with her cabinet this week to discuss where to reduce spending, along with possible tax increases. The government has until Friday to announce any cuts to spending already budgeted for this year.

The goal is to increase government savings before interest payments, known as the primary surplus, to the equivalent of 1.2% of gross domestic product. Last year the government generated no savings at all, and Brazil had a primary deficit of 0.6% of GDP.

The target is seen as a way to ensure Brazil won’t lose its investment-grade credit ratings.

Write to Paulo Trevisani at paulo.trevisani@wsj.com