Good morning! Today, we discuss the approval of the new fiscal framework by the House, ending the spending cap. Brazil’s religious transition. And the Amazon oil imbroglio continues.
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House approves fiscal framework and ends spending cap
Brazil’s lower house of Congress on Tuesday night approved a new fiscal framework for the country, which will replace the strict 2016 federal spending cap once President Luiz Inácio Lula da Silva signs it into law.
Why it matters. The new framework gives the government more room for spending, in contrast to the cap, which only allowed the federal budget to grow at a rate equal to the previous year’s inflation index.
- Spending growth will now vary from year to year between a minimum of 0.6 percent above inflation and a maximum of 2.5 percent.
- The spending growth rate will also be limited to up to 70 percent of the revenue growth rate if surplus targets are met. If not, the limit drops to 50 percent of growth. Surplus goals will have a...