SAO PAULO, Dec 16 (Reuters) - A decision by Brazilian President Dilma Rousseff's government to cut the fiscal savings target for next year shows the administration's ability to report budget surpluses large enough to stabilize debt ratios has diminished, Moody's Investors Service said on Wednesday.
The savings target reduction comes in line with Moody's decision to put the rating on review for downgrade, and the ratings company's expectations of "worsening fiscal and macroeconomic trends," senior sovereign debt analyst Samar Maziad said in a note.
A lawmaker involved in the elaboration of next year's budget said the government asked him to alter the budget guidelines bill to reduce the 2016 primary surplus goal to the equivalent of 0.5 percent of gross domestic product from a prior 0.7 percent of GDP. The target measures the balance of government revenues versus spending excluding debt servicing payments, and is considered a key measure of debt sustainability and fiscal health. (Reporting by Guillermo Parra-Bernal; Editing by Chizu Nomiyama)