(Adds context on Brazilian education, quote)
By Luciana Otoni and Asher Levine
BRASILIA/SAO PAULO, July 30 (Reuters) - Brazil is expected to announce another deep cut to education spending on Thursday, the latest step back from President Dilma Rousseff’s pledge to turn the Latin American giant into an “education nation” in her second term.
Brazil will further reduce the amount it spends on education by up to 2 billion reais ($593.4 million) this year as part of a round of budget cuts announced last week, two government sources with knowledge of the situation said on Thursday.
The reduction comes on top of nearly 9.5 billion reais in education spending cuts implemented in May as part of the government’s effort to slash expenditures and ward off a sovereign credit downgrade by rating agencies.
Shares of private education companies Kroton Educacional SA and Estacio Participacoes SA both extended early losses, falling by about 5 percent in Sao Paulo trading.
At her second inauguration earlier this year Rousseff pledged to focus on education, heralding “education nation” as her administration’s motto. The phrase is stamped on nearly all official communiques and is visible behind the president at most press conferences.
Last year Brazil’s federal government spent 23 percent of its tax income on education, well above the average of developed countries.
Still, low learning achievement and high dropout levels persist, dragging on productivity and hampering the country’s competitiveness in global markets.
In the OECD’s most recent PISA education rankings for 2012, Brazil ranked near the bottom in mathematics, science and reading.
To be sure, some analysts say the problem lies in inefficient spending and a lack of strong tools to evaluate new or existing programs, suggesting the cuts may have a limited impact.
“When you take a model that already isn’t working well and you simply amplify it, its irrational for you not to evaluate and reform the system,” Marcos Mendes, an economist and legislative consultant to Brazil’s Senate said in a recent interview.
Press representatives at the planning ministry declined to provide comment until after the government’s official announcement, expected later in the day.
Brazil’s education ministry also declined to confirm the size of the cuts.
$1 = 3.37 Brazilian reais Editing by Franklin Paul and Diane Craft