Brazil has no plans to extend emergency budget, aid to poor into 2021

BRASILIA: Brazil has no plans to extend emergency aid payments to the poor or extend the government's pandemic-fighting 'war budget' into next year, Economy Minister Paulo Guedes said on Wednesday.

Speaking to reporters in Brasilia, Guedes was responding to rising speculation and local media reports that either or both could be extended beyond the Dec. 31 deadline to help mitigate the ongoing economic and social impact of the pandemic.

Guedes has been among the most vocal of all government officials who have insisted that the emergency spending and aid to low-income families triggered by the pandemic will end on Dec. 31, and that efforts to reduce the record deficit and debt begin in earnest next year.

Rodrigo Maia, the powerful speaker of Brazil's lower house who has frequently clashed with Guedes, on Wednesday backed the minister's position that there should be no extension of the emergency measures into next year.

"The Chamber's position is the same," Maia tweeted along with a link to the Reuters story on Guedes.

Tensions between the two are beginning to thaw following a series of public spats. A few days ago, Guedes accused Maia of being allied to the left to stop privatizations, to which Maia responded that the minister was "unbalanced."

Confusion over how the government will fund a proposed new welfare program "Renda Cidada" next year for millions of Brazilian families, without breaking its spending cap fiscal rule, has weighed heavily on local markets recently.

Investors say it is a key reason behind the surge in long-term interest rates relative to short-term rates, as it has sowed doubt surrounding the government's long-term commitment to reining in its record deficit and debt.