Brazil's official budget deficit target for this year of 10% of gross domestic product is already looking optimistic, Treasury Secretary Mansueto Almeida said on Friday, a sign of the huge pressure on public finances from the coronavirus crisis.
FILE PHOTO: Brazil's Secretary of the Treasury Mansueto Almeida attends an interview with Reuters in Brasilia, Brazil February 12, 2020. Picture taken February 12, 2020. REUTERS/Adriano Machado
The government revised its primary deficit forecast, which excludes interest payments, to 10% of GDP only two weeks ago. But Almeida said that tax revenues could be lower than expected and warned against extending emergency spending programs. This target is based on postponed tax payments because of the crisis being made in the second half of the year and emergency spending measures not being extended, Almeida said.
Making the program permanent would increase the government’s primary expenditure by a further 8% of GDP and the tax load would have to rise by 10% of GDP.
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