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BRASILIA -(Dow Jones)- Brazil’s government will calibrate the disbursement of spending in the country’s 2012 budget according to its aim to maintain growth during the year, Treasury Secretary Arno Augustin said, according to the Estado de S. Paulo newspaper.

Augustin said the government hoped to boost public sector investment and would adjust the pace of other disbursements, including state transfers, export subsidies, and fiscal savings as part of its efforts.

“We can program expenses with greater or less speed,” Augustin said. “There are a series of things that we can plan over time, with an eye toward the economy.”

Brazil’s government has set a target for the country’s economy to grow between 4% and 5% next year. Brazil’s economy is expected to have grown by about 3% in 2011.

Augustin said that tight spending control in 2012 would be a necessary element to help the central bank continue to cut the country’s reference Selic interest rate. The bank has cut the rate by 1.5 percentage points to 11% since August in an effort to spur a slowing economy. According to recent market estimates, the bank is seen cutting the rate to as low as 9.5% before the end of next year.

But despite possible alterations in budget programming, Augustin said the government planned to fully meet its public sector primary surplus target equivalent to 3.1% of gross domestic product in 2012 without recourse to investment deductions or other accounting mechanisms used at times in the past.

Analysts, meanwhile, say the treasury may be “forced to walk a tight path” next year, as tax collection will likely grow less than in 2011, even with possible extra extraordinary revenues.

“Amid a significant pickup in mandatory spending, due to an increase in government transfers linked to the minimum wage, it will be hard to slash current spending in order to fully accommodate new investment,” said analysts at Brazil’s Banco Itau in a note Tuesday.

The bank said that circumstances may in fact force the government smaller primary surplus, at 2.5% of GDP.

-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com

(END) Dow Jones Newswires

December 27, 2011 10:41 ET (15:41 GMT)