The Brazilian government's accounts showed a deficit of 20.152 billion reais (6.370 billion dollars) last July, the Central Bank reported.
The primary balance does not include what Brazil spends on interest payments on public debt, but it is used as a reference for the country's public accounts and to define annual fiscal targets.
The rise in the primary deficit to record levels is attributed to the sharp drop in tax revenue as a result of the severe recession that the country has been facing since 2015 and the sharp increase in public spending.
After noting that revenues continued to decline, the government announced on August 15 its decision to raise the fiscal deficit target for this year by nearly 15%, to 159.000 billion reais (49.678 billion dollars).
In an attempt to meet its fiscal target this year, the Government had already announced several cuts in the national budget., decided in March and July of this year, which reduced spending for 2017 by 48.000 billion reais (15.000 billion dollars) and turned out to be insufficient.
The Government also hopes to reduce its expenses with a reform of the laws governing the retirement system, to tighten access and progressively limit the number of beneficiaries.
In another attempt to combat the deficit, the Government announced a plan for privatizations and concessions, through which it will offer 57 assets to the private sector, including airport terminals, highways, power transmission lines and important public companies such as Eletrobras, the largest electrical conglomerate in the country.
The government hopes to raise around 44.000 billion reais (about 14.000 billion dollars) from these sales.
Source: Reuters
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