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News > Latin America

Brazil Announces $20 Billion Stimulus Package

Published 29 January 2016
Opinion

The government of Dilma Rousseff turns its back on austerity and increases investment in infrastructure in order to boost the economy.

Brazil announced a major stimulus package Thursday night in order to boost the economy, which involves opening state funding for certain industries, like infrastructure projects and small exporters, in order to protect jobs.

Finance Minister Nelson Barbosa announced the US$20.4 billion (83 billion reais) fiscal plan, adding that the package would come at no extra cost to the Treasury. Rather, the body will work to free up credit from other areas of the economy.

“It is the duty of a government to make better use of the resources that already exist,” Barbosa told reporters.

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This will include measures to bring forward lines of rural credit and tap the country’s FGTS workers’ pension fund in order to encourage investments in infrastructure and housing, reported the Financial Times.

Some of the stimulus priorities include allowing concessions to private businesses focused on modernizing ports and airports, building roads and railways. Other measures include stimulus packages for small and medium companies and exporters.

The stimulus is equivalent to about 1.4 percent of Brazil's gross domestic product, says the Financial Times, while some of the measures are due to be implemented immediately.

The stimulus comes at a controversial time in Brazil's economy, which is experiencing one of the nation's worst recessions in over a century. According to the IMF, this trend is expected to continue, predicting that Brazil’s economy will contract to 3.5 per cent in 2016.

WATCH: Brazil: New Finance Minister Opposes Austerity Measures

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