Brazil makes deep cut to fiscal savings goal

Brazil's government announced a radical cut to its fiscal savings goal and said it would increase austerity measures, citing the worsening performance in the world's seventh largest economy.

Finance Minister Joaquim Levy said the lowering of the surplus goal from 1.1 percent of GDP to just 0.15 percent reflected the weakening economy.

With Brazil on the brink of recession, "there has been an effect on tax receipts," he said.

However, the government's commitment to austerity measures was unshaken.

Cuts of 8.6 billion reais ($2.66 billion) were announced, raising this year's cuts to $24 billion, the ministry of planning and budget said.

The Sao Paulo stock market, which had expected the changes, closed 1.08 percent lower.