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Brazil’s Finance Minister Excludes Additional Measures for Pension Reform

Brazil's Finance Minister Henrique Meireles in Brasilia, Brazil April 17, 2017. REUTERS/Ueslei Marcelino

Brazil’s government sees no need for additional measures to reduce social security spending despite recent changes to a pension reform proposal, Finance Minister Henrique Meirelles said on Friday.

President Michel Temer’s administration has agreed to soften the terms of its landmark social security reform to secure its approval in Congress, raising concerns among economists that further austerity measures would be necessary in coming years.

“The negotiations remain in line with our forecasts and in line with what we consider to be acceptable,” Meirelles told journalists in Washington on the sidelines of the spring meetings of the International Monetary Fund and World Bank.

“The pension reform as it stands today according to the latest draft bill is acceptable and will have the necessary fiscal impact,” Meirelles added.

The government initially expected the reform to reduce social security spending by 750 billion reais to 800 billion reais ($238 billion to $254 billion) over the next 10 years, Meirelles said earlier this month.

On Thursday, he estimated those savings to be 24 percent smaller due to the recent changes. Economists said about 40 percent of the original proposal was diluted.

Reuters Reporting by Alexandra Alper; Writing by Silvio Cascione; Editing by Chizu Nomiyama