Brazil's lower house approves 'war budget' to shield economy

SAO PAULO, April 4 (Reuters) – Brazil’s lower house of Congress approved a constitutional amendment late on Friday for a “war budget” to separate spending to shield the economy during the coronavirus outbreak from the government’s main budget.

The war budget, which was proposed by lower house speaker Rodrigo Maia and other lawmakers, still needs the Senate’s approval by three-fifths of the votes in two rounds.

The lower house approved the main text of the bill with 423 in favor and 1 opposed in a second round of voting. In the first round, the tally was 505 votes in favor and 2 against.

The bill creates an extraordinary fiscal and financial regime to prevent expenses related to the “state of emergency” decree triggered by the pandemic, which is valid until Dec. 31, from being mixed with the federal budget over the same period.

Besides easing fiscal and budgetary constraints to speed up measures tackling the outbreak, the amendment bill also grants the Brazilian central bank emergency bond-buying powers to stabilize financial markets during the crisis.

Brazil’s death toll rose to 359 on Friday, while confirmed cases jumped to 9,056, according to Health Ministry figures. (Reporting by Gabriela Mello; Editing by David Clarke)

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