By The Rio Times | Created at 2024-11-14 16:25:17 | Updated at 2024-11-22 07:21:40
1 week ago
Brazil’s financial analysts have adjusted their projections for the primary deficit in 2024. The latest estimate stands at R$ 62 billion ($10.88 billion), down from R$ 63.83 billion ($11.20 billion) in October. This forecast comes from the “Prisma Fiscal” report released by the Ministry of Finance on Thursday, November 14, 2024.
The projected deficit exceeds the government’s fiscal target. The Lula administration aims for a zero deficit, with a tolerance margin of 0.25% of GDP. This margin allows for a maximum deficit of R$ 28.8 billion ($5.05 billion). However, the market’s median projection surpasses this limit by R$ 33.2 billion ($5.82 billion).
Economists express concern over the government’s delay in curbing mandatory spending growth. Finance Minister Fernando Haddad had promised to unveil a spending review package by Friday, November 8, but failed to deliver. This delay has fueled skepticism among market analysts about the government’s commitment to fiscal discipline.
Focus: Financial Market Forecasts R$ 62 Billion Deficit for 2024. (Photo Internet reproduction)Focus: Financial Market Forecasts R$ 62 Billion Deficit for 2024
The economic team is considering revisions to several social programs. These include the Continuous Cash Benefit (BPC), the Fund for Maintenance and Development of Basic Education (Fundeb), unemployment insurance, and wage bonuses. These programs have seen significant expenditure growth in recent years.
Market projections indicate that the federal government may miss its fiscal targets for the next four years. This outlook raises questions about the sustainability of the new fiscal framework that replaced the spending cap in 2023. The framework’s effectiveness depends on the government’s ability to control expenses and boost revenues.
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The discrepancy between market projections and government targets highlights the challenges facing Brazil’s fiscal policy. It underscores the need for concrete actions to address the growing deficit. The coming weeks will be crucial as the government finalizes its spending review package.
As Brazil navigates these fiscal challenges, the balance between social responsibilities and financial stability remains a key concern. The government’s ability to implement effective reforms will be critical in shaping the country’s economic trajectory in the coming years.
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