July 17, 2019 / 1:11 PM / 3 months ago

Brazil eyes 63-bln-reais economic stimulus package - newspaper

BRASILIA, July 17 (Reuters) - Brazil’s government planning to unveil a fiscal stimulus package worth 63 billion reais ($16.8 billion) in the coming days to kickstart a flagging economic recovery, newspaper Valor Economico reported on Wednesday.

Citing comments made to the paper by Economy Minister Paulo Guedes, the government will free up 42 billion reais from the ‘FGTS’ workers’ guarantee funds, and 21 billion reais from a workers’ social contribution fund known as ‘PIS/Pasep.’

The figures are much higher than previously touted. In late May, the government was looking at freeing up resources of around 20 billion reais from the FGTS funds, sources told Reuters.

The economy ministry was not immediately available for comment.

According to Guedes, the legislative leap forward on social security reform this month when the lower house of Congress approved the basic text of the government’s bill means the focus can now turn to other reform measures, Valor reported.

The FGTS and PIS/Pasep measures could be announced as soon as Thursday, Valor reported Guedes as saying.

The government last week halved its 2019 economic growth forecast to 0.8% from 1.6%, in line with the central bank’s and broad market consensus outlook. (Reporting by Jamie McGeever; Editing by Bernadette Baum)

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