The smaller (but still big) public deficit in Brazil. The latest court development in the case that culminated in Dilma Rousseff’s impeachment. An update of the coronavirus situation in Brazil.
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Brazil’s deficit smaller but far from ideal
The Brazilian government published its financial results for 2019, posting the best results in six years. Still, the budget deficit was at BRL 95 billion—or 1.31 percent of the GDP. There is little chance that Brazil’s public accounts will get back to black before 2022.
Silver lining. The 2019 deficit was significantly lower than the government’s BRL 139-billion target, showing signs of the country’s commitment to tame its debt.
Why it matters. Brazil’s public debt soared to BRL 4.2 trillion (USD 992 million) in 2019, the highest ever recorded. Budget surpluses are important because they allow the government to reduce indebtment levels—freeing up space for more investments.
Bottom line. Before taking office, Economy Minister Paulo Guedes promised to end the budget deficit within one year. But, as market analyst Ilan Arbetman points out, “the deficit remains as a structural matter.” During an event with investors, former Central Bank President Armínio Fraga called the...