Brazil is on par to set a new public deficit record this year, according to Special Federal Economy Secretary Waldery Rodrigues. The latest projections by the Economy Ministry have Brazil sinking in debt in all possible scenarios. The debt-to-GDP could reach up to 93.1 percent — from 75.8 percent last year.
According to Mr. Rodrigues, the amount dedicated to fighting the spread of Covid-19 will cost the federal government up to BRL 349.4 billion (USD 63.64 billion). This number is equivalent to 4.81 percent of the GDP — which is more than twice the percentage average spent on tackling the pandemic by other emerging economies (2.3 percent).
“This shows our response was quick and attentive,” the secretary said. Still, millions of people are having trouble accessing their benefits — and the government has yet to decide whether or not to extend a three-month program granting a BRL 600 emergency salary to informal workers and other vulnerable Brazilians.
Last month, Brazil Daily explained what a post-Covid-19 world will look like for Brazil’s public debt.