Belt-tightening in Brazil aimed at fighting economic crisis

RIO DE JANEIRO – Brazil’s interim President Michel Temer is announcing belt-tightening measures aimed at pulling Latin America’s largest economy from its worst crisis in decades.

Temer says the government will take back about $ 28 billion it loaned Brazil’s state-run investment bank and abolish a fund created to channel oil revenues into education.

Temer also pledged Tuesday to sharply cut public spending in a bill he’s preparing to send to Brazil’s Congress. And he’s appointing a commission to negotiate reforms to the country’s pension system.

Brazil’s economy is expected to contract around 3 per cent this year after a fall of almost 4 per cent in 2015.

Temer took over after President Dilma Rousseff was impeached earlier this month for allegedly using accounting tricks in managing the federal budget.