Brazil Freezes Rio's Accounts Over Unpaid Debt
Fahad Shabbir (@FahadShabbir) Published November 08, 2016 | 08:25 AM
RIO DE JANEIRO, Nov 8 (APP - UrduPoint / Pakistan Point News - 08th Nov, 2016 ) - The Brazilian government froze Rio de Janeiro state's bank accounts Monday, ordering the struggling state to pay up on $53 million in overdue debt.
Rio, one of the states hardest hit by a deep recession in Brazil, "is blocked from making any kind of payment until the amount it owes the state has been paid," said the state finance secretariat.
Officials said the freeze would only apply for three days, and would not prevent the state from paying civil servants' salaries on November 16. Pummeled by Brazil's worst recession in a century, Rio is nearly bankrupt, with total debt set to reach 17.5 billion reals ($5.4 billion) by the end of the year.
With tax revenues plunging, the state has had to make drastic cuts to health, security and other sensitive budget lines. On Friday, Governor Luiz Fernando Pezao announced a package of tough austerity measures, including cuts to social programs, a tax hike for retirees, a sales tax increase and a transport fare rise.
The unpopular proposals must now pass the state legislature. "If this package isn't approved, there's nothing else we can do," Pezao told tv Globo on Monday. "We would start next year with a hole of more than 50 billion reals, and from there, we wouldn't be able to guarantee paying workers their full salaries in 2017." Rio has already warned it may not be able to pay employees their December bonuses.
Brazil has been hit hard by a plunge in global prices for its commodity exports, as well as political gridlock caused by the impeachment of former president Dilma Rousseff over accounting irregularities. The economy, Latin America's largest, shrank 3.8 percent last year, and is facing another contraction of three percent this year.
Related Topics
Recent Stories
Azad Jammu Kashmir Prime Minister Chaudhry Anwar ul Haq condoles over the demise ..
Senior Army Commanders visit families of customs' martyrs to condole
Poland-Pakistan corporation established on solid foundations: Polish envoy
Chairman Senate passes ruling to constitute Special Committee of Upper House
Stocks fall as tech shares sink, US economy slows
Honda announces US$11 bn EV battery and vehicle plant in Canada
All AJK Inter-varsity Speech Competition urges UNO to ensure early grant of righ ..
AJK CEC calls on President Sultan Chaudhry
Assistant Secretary General of UNDP, Director of Regional Bureau for Asia & Paci ..
Portugal marks 50 years of democracy with far right on the rise
IHC suspends notification regarding cut in prices of 'naan & roti'
More Stories From World
-
Honda announces US$11 bn EV battery and vehicle plant in Canada
14 minutes ago -
Portugal marks 50 years of democracy with far right on the rise
12 minutes ago -
Oman, UAE deluge 'most likely' linked to climate change: scientists
53 minutes ago -
BHP launches $38.8 billion takeover bid for rival Anglo American
1 hour ago -
Saudi oil giant Aramco agrees major FIFA sponsorship deal
1 hour ago -
Putin says plans to visit China in May
1 hour ago
-
Haiti transitional council sworn in after months of violence
2 hours ago -
Ukrainian village battles mines year after Russia forced out
2 hours ago -
China's Shenzhou-18 mission takes off bound for space station
2 hours ago -
Thousands of flights scrapped as French air traffic controllers strike
2 hours ago -
India's IndiGo to buy 30 A350 planes: Airbus
2 hours ago -
Scottish leader scraps coalition deal with Greens
2 hours ago