Brazil recorded a primary deficit in public accounts of 2017 billion reais (about 35.183 billion dollars) in the first half of 10.994,7, the largest for the period in the last 16 years, the Central Bank reported.
Brazil recorded a primary deficit in public accounts of 2017 billion reais (about 35.183 billion dollars) in the first half of 10.994,7, the largest for the period in the last 16 years, the Central Bank reported on Friday (28.07.2017).
The negative balance between state expenditure and revenue, including that of the central government, regional governments, municipal governments and state-owned companies, has not been so high for the first half of the year in Brazil since 2002, when the fiscal deficit began to be measured with more rigorous criteria.
El deficit in the first half of 2017 was almost 48% higher than in the first six months of 2016.
The primary result, which does not include expenditures for the payment of debt interest, is used by the Government as a parameter for its fiscal goals.
The negative balance in the last twelve months until June amounted to 167.198 million reais (about 52.249,37 million dollars), the equivalent of 2,62% of the country's Gross Domestic Product (GDP), and shows Brazil's serious fiscal crisis after two years of deep recession.
The Central Bank attributed the high deficit of the semester to the low tax collection, which reflects the still dWeak economic activity after two years of negative growthor a period in which Brazilian GDP shrank by 3,8% in 2015, its worst result in 25 years, and by 3,6% in 2016.
The negative balance was also caused by the Increase in central government spendingl, which decided to advance the payment of compensation determined by the courts and which was generally paid at the end of the year to May and June.
This advance caused the primary deficit in June alone to reach 19.552 billion reais (about 6.100,6 dollars), also the largest negative balance for this month in 16 years.
The deterioration of public accounts raised the gross debt of the Brazilian public sector in June to a record 4,67 trillion reais (about 1,46 trillion dollars), equivalent to 73,1% of GDP and above the 72,5% of GDP it was at until May.
With the By increasing taxes on gasoline, diesel and ethanol, the Executive hopes to collect 10.400 billion reais (about 3.300 billion dollars) additional for the remainder of the year.
The new spending cuts follow another announced last March worth 42.100 billion reais (about 13.500 billion dollars) from various budget items.
The government hopes that the measures will be sufficient to ensure compliance with the fiscal target it set for 2017, when it intends to limit the country's public deficit to 139.000 billion reais (about 44.000 billion dollars), equivalent to 2,0% of GDP.
Government forecasts indicate that 2017 will be the fourth consecutive year with a primary deficit, after the record of 155.791 billion reais (about 49.000 billion dollars) registered in 2016.
Source: EFE
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