BRASILIA, July 6 (Reuters) -
Brazil's lower house is expected to give its final vote on long-awaited government fiscal rules in August, frustrating expectations that this stage would be concluded this week, the sponsor of the proposal Claudio Cajado said on Thursday.
In an interview with Reuters, lawmaker Cajado stated that the postponement would occur due to the concentrated effort to vote on the reform of consumption taxes, another priority of President Luiz Inacio Lula da Silva's government.
The prospect of a delay in the voting, earlier reported in the local press, contributed to a 1.6% decline in the Brazilian real against the U.S. dollar and a 1.78% drop in the Brazilian stock exchange.
According to Cajado, it is "understandable" that the
tax reform
has taken precedence, given the presence of various governors, mayors, and representatives from the productive sector in Brasilia, all striving to reach a definitive agreement on an issue that has eluded successful changes by previous administrations.
The government's
new fiscal rules
, which aim to avoid uncontrolled growth of public debt after Lula secured Congress approval to boost social expenses, had already been approved by the lower house this year. However, the Senate then introduced some changes to the text, triggering the lawmakers' need for a new round of voting.
Cajado also said that the vote on a change to
tax trial rules
, seen as crucial by Lula's economic team to balance the country's budget, is also likely to be postponed to August, another setback for the government that expected to vote on the text this week. (Reporting by Ricardo Brito; Writing by Marcela Ayres; Editing by Marguerita Choy)
