10 November 1997 - International [Brazil]

A tough package of spending cuts and tax increases worthR$20 billion (US$18 billion), 2.5% of GDP, is announced, designed to restore confidence in the economy in the light of recent turmoil in financial markets. The total of 51 measures includes increases in taxes (both direct and indirect), 33,000 public sector redundancies for workers on temporary contracts, an acceleration of the privatisation programme, the boosting of exports and assistance for small companies. The government is now using 2% as its forecast for real GDP growth in 1998 rather than the previously assumed 4%.