Happy Friday! Today, we talk about the government’s expected struggles in the pursuit of a zero deficit. The new front in the tax reform war. And the country’s credit outlook.
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Accounts court flags government revenue overstatement
In an analysis of the 2024 budget law, the Federal Accounts Court, a public spending watchdog, issued a report echoing the warnings of many economists: revenue estimates may be unrealistically optimistic.
- By the court’s own calculations, Brazil could post a primary deficit of BRL 55 billion (USD 11.6 billion) this year, instead of meeting its zero-deficit target.
👉 Why it matters. According to Brazil’s new fiscal framework, the government’s primary targets have a tolerance band of 0.5 percent of GDP. A deficit of BRL 55 billion would be dangerously close to this threshold. Missing the zero-deficit target would erode trust in the administration and trigger penalties that would limit its ability to spend.
By the numbers. The budget projects revenues to reach 19.2 percent of GDP in 2024, significantly higher than in recent years. Revenues...