BRASILIA, Nov 7 (Reuters) - The Brazilian government will not ask Congress to modify its goal to eliminate the fiscal deficit in 2024, at least for now, sources familiar with the matter said on Tuesday, giving its finance minister more time to negotiate measures to boost revenue.
The decision comes after unexpected remarks made by President Luiz Inacio Lula da Silva last month sparked debate on whether changes would be made to the government's ambitious target to erase the fiscal deficit by next year.
"It would be tough to get to a (deficit) target of zero, especially because I don't want to make cuts in construction investments," Lula told reporters in October, prompting a negative market reaction.
The comments blindsided finance minister Fernando Haddad, and pitted him against other members of Lula's cabinet, such as chief of staff Rui Costa, who supported an immediate change in the target.
However, Lula has in recent days met with leaders of his coalition in Congress to sway them to vote in favor of the measures and his administration is now waiting to see if they pass before revisiting the fiscal target, the sources told Reuters.
Whether or not the measures pass will determine if changes to the fiscal target will be needed, and if so, by how much, the sources added.
Haddad himself has admitted that, at the moment, the numbers do not add up. Tax revenue growth has been below expectations, making it difficult to achieve the goal without slashing the country's budget, which Lula has said he does not intend to do.
The decision has also given Haddad political control of the negotiation process. Even if it is still necessary to change the target, said a source, the decision and the leading role must come from Haddad.
(Reporting by Lisandra Paraguassu; Writing by Peter Frontini; Editing by Sam Holmes)
