After obtaining refinancing of $31 billion of Brazil's $100 billion foreign debt with international banks last week, Finance Minister Dilson Funaro signaled the country's creditors today that it intends to limit its annual payments on that debt to 2.5 percent of its gross national product.
Funaro said during a visit to Argentina -- another major Latin American debtor -- that Brazil cannot achieve the annual 7 percent growth rate for its economy toward which the government is striving if it has to pay foreign creditors 4 percent of its gross national product.
Brazil's annual production of goods and services -- gross national product -- is about $250 billion. A 2.5 percent limit on debt service payments would cut net payments to foreign banks by $2 billion to $3 billion next year.
Payment of interest and unpostponed capital amortization cost Brazil nearly $12 billion in 1984. That fell to less than $11 billion last year as interest rates declined and is expected to cost about $9 billion this year.
Limiting debt-servicing payments to 2.5 percent of gross national product would imply a reduction in the annual level in 1987 to just over $6 billion.
A Funaro adviser, Stephen Kanitz, said Brazil will offer creditor banks a system to convert debt into long-term bonds that would be protected against inflation and would be internationally marketable.