Brazil's infrastructure projects face $1.87 billion budget freeze

The Brazilian government on Thursday (July 27) announced a $1.87 billion budget freeze and the reappropriation of $698 million from this year's budget. The cut will impact the Accelerated Growth Program (PAC) by $2.34 billion, of which $1.65 billion will be sequestered and $698 million will be reappropriated for other purposes.

The PAC is a federal government plan to boost Brazil's economy by investing in ports, highways, airports, sewage networks, power generation, waterways, railways, and other projects.

The remainder of the budget freeze consists of per-state appropriations ($67.9 million) and individual congress member appropriations ($135.1 million).

The cut was motivated by last week's announced downward revision of tax revenue from $440 billion to $438 billion. It had been expected to be narrower with the prospect of extra revenue, but Planning Minister Dyogo Oliveira, who is in charge of the ministry responsible for budgetting, said the government was unable to complete the required analyses before the deadline of July 28.

Translated by Mayra Borges