Lula Suspends Plan to Start Brazil's Wealth Fund, Folha Reports

By Adriana Arai
May 23 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva suspended a plan to start a sovereign wealth fund because he has questions about the use of budget resources to form it, Folha de S. Paulo newspaper reported, without saying how it obtained the information.
Lula asked Finance Minister Guido Mantega to halt the proposal after being advised by economists outside the government that it would make more sense to use the budget resources to pay debt than start a wealth fund, Folha said.
The president is still considering raising the budget surplus before interest payments to pay debt and using international reserves to create the wealth fund, Folha reported.
Officials at the presidential palace weren't immediately available for comment, the press office in Brasilia said when contacted by Bloomberg News today.