The Brazilian government says it is implementing $30 billion in budget cuts to curb rising inflation.
Officials made the announcement Wednesday, but said the decision will not impact spending on social programs or infrastructure. Finance Minister Guido Mantega said the government will remove all remaining stimulus packages that were put in place two years ago to counteract the global financial crisis.
The cuts are equivalent to 1.2 percent of Brazil’s total gross domestic product for this year. Full details are expected to be released next week.
Brazil’s economy grew more than 7 percent last year. Inflation is running at around 6 percent, above the government target of 4.5 percent.
Last month, Brazil took steps to stop the rise in value of its currency, the real, as part of an effort to stabilize its financial system.
The measures make it more expensive for Brazil’s commercial banks to invest in the currency. Investors have been buying the real on speculation it will continue to strengthen against the dollar.
President Dilma Rousseff has promised to resolve the currency imbalance that is hurting some Brazilian industries that export their products.
Brazil, Latin America’s biggest economy, is now considered one of the world’s major emerging economies, along with Russia, China and India.