Brazil’s President Dilma Rousseff will cut a key fiscal savings goal for next year to safeguard a landmark welfare program, a government source with direct knowledge of the matter said on Tuesday, a move that could raise tensions in her economic team.
The 2016 primary surplus target, which excludes debt servicing payments, will be cut to below 0.5 percent of gross domestic product from the original goal of 0.7 percent, the source told Reuters.
Highlighting divisions within the government, Finance Minister Joaquim Levy said on Tuesday it would be a “mistake” to reduce the goal, which aims to boost investor confidence as Brazil struggles to plug a widening fiscal deficit.
Local media has reported that Levy has threatened to quit if the original target is not maintained, but he has publicly denied doing so.
Brazil’s overall budget deficit, which includes interest payments, soared to 9.5 percent of GDP in October from 5 percent in the same month a year ago.
Brazil Energy Insight 
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