BRASILIA, Oct 26 (Reuters) - Brazil's Finance Minister, Dario Durigan, said in an interview with local news service Broadcast on Monday that the government will pursue a higher effective primary surplus next year, although he did not specify a figure.
Following a sweeping selloff across Brazilian markets triggered by fiscal concerns over the reelection of leftist President Luiz Inacio Lula da Silva, Durigan also said the government plans to send legislation to Congress this year requiring policymakers to formally target the midpoint of the primary balance goal.
The minister said the Treasury had intervened in the government bond market on Monday by canceling scheduled debt auctions and conducting extraordinary buyback operations to "ensure rationality" in trading after a sharp jump in long-term interest rate futures triggered by the election.
"But in the short, medium and long term, we will return to discussing fiscal stability, formally pursue the midpoint of the target and raise our surplus projection for next year," Broadcast quoted Durigan as saying.
Brazil's fiscal target for next year calls for a primary surplus, excluding interest payments, of 0.5% of GDP, with a tolerance band of 0.25 percentage point on either side.
Under the fiscal framework, however, the government can exclude certain expenditures when assessing compliance, most notably part of its stock of court-ordered debt payments.
In August, the government projected an effective primary surplus of 0.1% of GDP for next year. If achieved, it would be Brazil's first fiscal surplus since 2022.
Most investors and economists, however, view that pace of fiscal consolidation as too slow given the rapid growth of mandatory spending, pushing investors to demand ever-higher premiums to hold Brazilian debt.
Brazil's gross public debt, the government's main solvency indicator, is up more than 10 percentage points during Lula's current term to 82.9% of GDP.
(Reporting by Marcela Ayres; Editing by Andre Romani and Fernando Cardoso)