BRASILIA, July 22 (Reuters) - Brazil will freeze an additional 10 billion reais ($4.48 billion) in budgeted spending this year, officials said on Monday, in an effort to bolster investor confidence in the government's commitment to fiscal austerity.
The new freeze, which was originally expected to reach up to 20 billion reais, is aimed at helping the central bank battle inflation, which hit a 20-month high in June.
The government had announced a freeze of 28 billion reais in May, bringing the total amount for this year to 38 billion reais, still below last year's freeze of 55 billion reais.
After two years of aggressive spending President Dilma Rousseff is trying to convince investors her administration will stick to the tough fiscal rules that helped stabilize Latin America's largest economy after decades of crises.
'I'm confident we will meet our (fiscal) targets this year,' Finance Minister Guido Mantega told reporters, reiterating the government aims for a primary budget surplus equivalent to 2.3 percent of gross domestic product this year. 'Investors' confidence will be recovering soon.'
The new freeze includes spending on travel, rent, electricity and the hiring of new public servants.
In rare comments on the country's fiscal strategy, central bank chief Alexandre Tombini told a local newspaper on Sunday that the government needs to be clear in its next fiscal policy steps to bolster investors' confidence in an economy that is showing new signs of weakness.
Rousseff faces growing spending pressures ahead of next year's presidential election, in which she is widely expected to run, and after a recent wave of nationwide demonstrations in which thousands of Brazilians demanded more investment in health and education.
($1 = 2.23 Brazilian reais)
(Reporting by Alonso Soto and Luciana Otoni, writing by Alonso Soto) Keywords: BRAZIL ECONOMY/FISCAL
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