BRASILIA, Nov 11 (Reuters) - Brazilian President Dilma Rousseff on Tuesday asked Congress to allow the government to deduct all of its investments and tax exemptions from a key 2014 fiscal target, effectively lowering a goal that it will miss for the third straight year.
In a new budget bill sent to Congress, the Rousseff administration did not quantify those deductions. In the original 2014 budget legislation, it was allowed to deduct a total of 67 billion reais ($26.2 billion), or more than 1 percent of GDP, from its primary goal.
The primary surplus, or revenue minus expenditures before debt payments, is considered a crucial measure of a country’s capacity to repay debt.
The request for a more flexible target reflects the weak state of the government’s finances after a series of tax cuts and high public spending reduced savings. In the first nine months of the year, tax exemptions and investments amounted to about 123 billion reais, according to data from the Treasury.
Since Rousseff took office in 2011, Brazil’s public finances have declined sharply, pressuring inflation and putting the country in the sights of ratings agencies.
Brazil’s primary surplus target for this year had been 99 billion reais, or equal to 1.9 percent of GDP.
$1 = 2.5607 Brazilian real Reporting by Luciana Otoni; Writing by Alonso Soto; Editing by Lisa Von Ahn