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Brazil cuts spending and raises taxes

The Brazilian government has introduced a $7bn (£45bn) package of investing cuts targeted at inserting an enormous black hole within the countrys 2016 budget

Simultaneously it revealed intends to raise another $8bn by returning an unpopular financial transactions tax which was eliminated eight years back

The federal government is battling to drag the countrys economy from recession

It has additionally been hurt through the slump in Leader Dilma Rousseffs public approval rating that is now just 8%

The measures were introduced in a news conference by Finance Minister Joaquim Levy and Planning Minister Nelson Barbosa

They include reducing the amount of government ministries from 39 to 29 in addition to cutting 1000 public-sector jobs and freezing the pay of remaining condition employees

Mr Levy stated the axe would fall on some large public infrastructure projects But projects made to benefit lesser Brazilians like the social housing programme Minha Casa Minha Vida (The House My Existence) may also be hit

Experts were not impressed using the package saying it had been unlikely to complete much to revive the general public finances to health

Wound up with the sense the government has become scraping the barrel in order to plug its budget hole stated Neil Shearing chief emerging marketplaces economist at Capital Financial aspects

Indeed the most recent measures reveal much more about the impotence from the government in having the ability to constrain investing than other things

Brazils economy continues to be depressed through the finish from the global goods boom while a corruption scandal centred on condition oil giant Petrobras has broken investor confidence

Leader Rousseffs experts also accuse her of policy mistakes throughout her first term including interventions within the energy market along with a failure to create inflation in check

However, many supporters of her left-wing Employees Party have revolted against her newly found attempts at austerity using the MST land-reform movement accusing her of getting adopted a neo-liberal programme at odds together with her election promises

A week ago South america lost its investment-grade credit score carrying out a downgrade by Standard & Poors to junk status

The United States rating agency stated mounting political turmoil and also the difficulties faced by Leader Dilma Rousseffs government in dealing with growing debt was behind the choice