By Marcela Ayres and Lisandra Paraguassu
BRASILIA (Reuters) - Brazilian President Jair Bolsonaro said on Wednesday his government will announce an economic stimulus package this week to revive flagging growth, confirming earlier media reports, in an effort to mark the first 200 days of his administration.
Earlier on Wednesday, newspaper Valor Economico reported Economy Minister Paulo Guedes as saying the government will free up 63 billion reais ($16.8 billion), comprising 42 billion reais from the 'FGTS' workers' guarantee funds and 21 billion reais from a workers' social contribution fund.
"It is an injection, a small capital injection into the economy, right? And it is welcomed because the economy, according to experts, is starting to show positive signs, especially the ones coming from lawmakers," Bolsonaro said during a summit of Mercosur nations in Santa Fe, Argentina.
Bolsonaro's comments come days after the lower house of Congress approved in the first round of voting a landmark pension reform bill, seen as a critical step to restoring health to public finances and boosting investor, consumer and business confidence.
The 63 billion reais package Guedes flagged is much higher than previously touted. In late May, the government was looking at freeing up resources of around 20 billion reais from the FGTS funds, according to sources.
The Economy Ministry did not comment on the minister's remarks to Valor Economico, saying there are no announcements so far scheduled.
A person familiar with the issue told Reuters the economic team will sent two different proposals to Bolsonaro, with one of them freeing up a more modest amount of around 30 billion reais to avoid jeopardizing housing funding. FGTS accounts for almost half of the funds allocated to financing homes.
Bolsonaro's government is rushing to announce the stimulus measure on Thursday, alongside other stimulus to mark the first 200 days of his administration, but it is uncertain if it will be finished in time, according to sources.
The 200-day package also includes revoking a series of presidential decrees deemed outdated or with no purpose, they said. Another measure that could possibly be announced is the creation of a program for the elderly.
The government last week halved its 2019 economic growth forecast to 0.8% from 1.6%, in line with the central bank and broad market consensus outlook.