SAO PAULO, Oct 2 (Reuters) - Brazil “sacrificed” its savings goal to invest in healthcare and education, Finance Minister Guido Mantega said in an interview published online by Globo News on Thursday, three days before a presidential election.
Brazil on Tuesday posted its fourth straight monthly primary budget deficit, for August, making it nearly impossible for President Dilma Rousseff’s administration to achieve its fiscal target.
“There is no waste,” Mantega said in the interview. “What we have is an important investment for the population.”
Mantega and other senior officials have signaled the government would probably cut the key fiscal savings target this year as tax revenues slow while public spending picks up ahead of this month’s elections. The primary balance, or savings before debt payments, is a gauge of the country’s fiscal health that investors watch closely.
Mantega also reiterated in the Globo interview that the government would increase gasoline prices this year, a move that would help state-run oil company Petroleo Brasileiro SA but could also stoke already-high inflation.
In August, a senior government source told Reuters that the administration might raise gas prices up to 6 percent after the election.
The most recent polls show Rousseff winning against either of her opponents in an Oct. 26 run-off vote. Rousseff has said Mantega, who has lost the confidence of many investors, would be replaced if she is elected for a second term.
Rousseff’s rivals and many economists blame her and Mantega for pushing the once-booming Brazilian economy into a recession with interventionist policies that have hurt investment as well as business and consumer confidence. (Reporting by Caroline Stauffer; Editing by Alonso Soto and Lisa Von Ahn)