Brazilian Government Predicts a $ 42.5 Billion Deficit in 2017

07/08/2016 - 09h21

On Thursday, July 7, the economic team of Interim President Michel Temer disclosed a deficit of R$ 139 billion ($ 42.5 billion) in public accounts for the next year and indicated that "bitter measures" such as tax raises may be taken in August to avoid an even worse result at the end of the year.

To achieve the goal, the government promised to carry out a fiscal effort of R$ 55 billion ($ 16.8 billion). Finance Minister Henrique Meirelles told Folha that R$ 25 billion (8.4 billion) is likely to come from the privatization and concession program.

	Myke Sena/FramePhoto/Folhapress
	Finance Minister Henrique Meirelles (L) and Interim President Michel Temer. "Bitter measures" may be taken in August.

Meirelles says that the other R$ 30 million ($ 9 billion) is likely to come from a recovery in revenues which the government believes will occur in 2017 – however, estimates are not precise yet. If the recovery does not happen, the government will propose raising taxes.

The goal of R$ 139 billion (2% of the G.D.P.) is below the deficit in government accounts forecasted for this year, which amounts to R$ 170.5 billion ($ 52.1 billion, 2.8% of the G.D.P.).

In the face of journalists' insistence to know if the government will raise taxes to help to reduce the deficit, Meirelles said that there are no forecasts at the moment, but did not discard the possibility that such increase may be adopted in August. "We haven't discarded isolated tax raises."

The schedule defined by the Senate shows that the impeachment of President Dilma Rousseff will have come to a conclusion by then. If her removal from office is confirmed, Temer will not be interim president anymore and will gain the right to stay in office until the end of 2018.

Translated by THOMAS MUELLO

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