SAO PAULO: Brazil is raising its deficit ceiling for this year and 2018 because of a big drop in tax revenue, sluggish growth and other woes in Latin America’s biggest economy.
The government’s limit for the fiscal deficit this year was the equivalent of $43.7 billion, and $40.6 billion in 2018. But now it will go up to $50 billion for both years, Finance Minister Henrique Meirelles said Tuesday.
The fiscal deficit is defined as the difference between what a government spends and its revenues, excluding money that comes from borrowing. Meirelles said the numbers will change significantly, again for the worse, in 2019 and 2020 as well. In the latter case, what had been a small projected surplus of $2.6 billion is now expected to be a deficit of $20.4 billion. These adjustments had been expected since Friday when President Michel Temer and his economic advisers met to discuss the change. But the debate lasted into this week.
Brazil emerged from its worst ever recession in the first quarter of 2017, but just barely.
Published in Daily Times, August 17th 2017.
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