LatinNews Daily - 23 August 2023

* Brazil’s lower house of congress has approved the government-backed bill for a new fiscal framework, with a final vote tally of 379 in favour and 64 against. The lower house first approved the bill in May and the legislation was then amended in the senate, before being passed back to the lower house for deputies to review the senate’s changes. The senate did not change the bill’s core aim to replace the public spending limit, which would now allow the government to increase annual spending by up to 70% of revenue growth. But the senate did exempt some public spending from the framework’s limits, including the funding for local public services in the capital region around Brasília (‘Distrito Federal’, DF) and a national education funding programme (Fundeb). The lower house approved these funding exemptions added by the senate but rejected an amendment that would have changed the way that inflation was taken into account when calculating the annual budget limit, a technicality which would have allowed the government to increase its 2024 budget. The final approval of the fiscal framework marks a major boost to the economic agenda of President Luiz Inácio Lula da Silva and the bill will be promulgated into law when Lula signs it.