Observers have credited the troubles in Argentina for spurring leaders in neighbouring Brazil for passing the budget in apparently record time.

Whereas in more stable times, Brazil's budget would not have been agreed until well into the year it was meant to cover, Congress has pushed through the 2002 figures four days short of the new year.

Had the budget not been nodded through, it might well have got bogged down in next year's presidential elections - which, while not due until October, are believed likely to hamper lawmaking for months in advance.

Politicians sidelined arguments over the minimum wage, and found compromises on support for small farms, to pass the package.

The budget calls for a surplus of 3.5% next year - spending of 271bn reals (117bn) against revenues of 322bn reals.

This year's budget surplus is set to come in at 3.25%.

Recent history

The International Monetary Fund has demanded a surplus as a condition for cash injections including a $15 loan granted in August.

Brazil has sought to strengthen its ties with the IMF to help underpin international confidence, and prevent the spread of the economic crisis in Argentina.

It was not long ago that policymakers in Brasilia were facing a collapse of their own.

Among a string of reforms since the early 1990s, the country opened up to imports and launched a new currency, the real, to boost an economy beset with runaway inflation.

Lingering problems

While the reforms initially saw millions lifted out of poverty, the benefits proved temporary.

Weaknesses in fiscal policy were uncovered as inflation dropped, and the economy fell deep into a current account deficit thanks to the flood of imports.

Brazil itself was left at risk of default, as its currency was devalued, and confidence in the country slumped.

IMF criticised

More recently, some observers have blamed budget cuts, implemented with IMF backing, for undermining economic growth.

The global slowdown has made matters worse, as has energy rationing prompted by a power crisis.

The real has slid more than 30% over the year, with GDP growth also lower.

Exports have suffered in major markets except that of Argentina, where the pegging of the peso to the dollar has kept Brazilian products relatively cheap.

Measures in the new budget are being deemed likely to help boost exports.

Brazilian analysts also hope that the IMF money will help the country escape the worst affects of the Argentine crisis.