Brazil's Government Foresees 2021 Budget Deficit

Calculations point to a deficit close to US$ 29 billion next year, more than double the current forecast


Even if the Brazilian government monitors coronavirus spending this year, Bolsonaro's government predicts that public spending will increase dramatically in 2020. Thus, the government is predicting and even larger fiscal deficit in 2020 and 2021.

In the Budget Guidelines Law project, which must be presented by this Wednesday (15th), the Ministry of Economy must ask Congress for authorization for the 2021 fiscal deficit target to be at least double the R$ 68.5 billion forecast today.

A ministry of the economy employee told Folha that the calculations already point to a gap close to R$ 150 billion (US$ 29 billion). The numbers are calibrated in the economic area and are not yet closed.

Minister of the Economy Paulo Guedes. (Foto: Pedro Ladeira/Folhapress, PODER) - Folhapress

The result is a reflection of the difference between the federal government's collection and spending estimates. In other words, the government expects an even greater mismatch in the accounts, which will be generated by lost revenues and increased spending.

To estimate next year's accounts, the economic team observes the indicators of the economy's performance, such as GDP (Gross Domestic Product) and inflation. With that, it projects the expenses for the year and the amount it expects to collect from taxes.

Translated by Kiratiana Freelon

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