Lula vows to rein in Brazil's budget whenever needed
Adds details, quotes in paragraphs 4-10
By Lisandra Paraguassu
BRASILIA, July 22 (Reuters) -Brazilian President Luiz Inacio Lula da Silva said on Monday his government will make budget freezes whenever necessary, vowing fiscal discipline after investor doubts in recent weeks about his willingness to cut spending in order to hit budget targets.
"We will make a budget freeze every time we need to do it," he told international news agencies when asked about a recent 15 billion reais ($2.7 billion) cut in the 2024 budget as his government struggles to meet this year's fiscal target.
"If we spend more than we earn, we will go broke," he said, while stressing the importance of making Brazil's economy grow and controlling inflation.
In the wide-ranging 90-minute interview, Lula said he was "scared" by rhetoric from Venezuelan President Nicolas Maduro ahead ofSunday's presidential election. He said he hopes U.S.-Brazil relations remain "civilized" whether Americans elect former president Donald Trump or a Democrat in November.
The leftist leader has been resistant to more structural changes to Brazil's spending on social programs, which some economists consider crucial to slowing the rapid growth of mandatory government expenses.
Lula's stance, combined with repeated criticism of monetary policy overseen by central bank governor Roberto Campos Neto, has contributed to the weakening of Brazil's currency and a rise in the price of interest rate futures since early June.
More recently, however, Lula has stressed that his government will not spend more than it collects, while showing willingness to trim welfare rolls to exclude ineligible recipients.
"Fiscal stability, economic stability and social stability are three fundamental values in my life," said Lula, a former labor organizer born into poverty who oversaw robust economic growth and welfare expansion in his 2003-2010 presidency.
Still, Lula resumed criticism of central bank chief Campos Neto, suggesting he held too many meetings with former far-right president Jair Bolsonaro, who appointed him to a term that will end in December.
Lula said his future nominations to the central bank's interest rate-setting board, including the governor role, would be made in agreement with Finance Minister Fernando Haddad.
Lula said the next central bank president must be "technically competent and politically honest."
Reporting by Lisandra Paraguassu
Writing by Marcela Ayres
Editing by Brad Haynes, Gabriel Araujo and Kevin Liffey
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