Pandemic could ravage already-feeble Brazilian states’ finances

Many of Brazil's states are already in dire financial straits, but the pandemic has created an urgent need for federal bailouts

Pandemic could ravage already-feeble Brazilian states' finances
People wait in line to get food donations in downtown São Paulo. Photo: Nelson Antoine/Shutterstock

In recent years, several Brazilian states have found themselves in dire financial straits, with budgets cut back to the bone and difficulties paying the wages of civil servants. The Covid-19 pandemic has come along to make this situation even more desperate, and Brazil’s states are now relying on help from the federal government. At the end of May, President Jair Bolsonaro submitted a bill instating a BRL 125 billion (USD 24.5 billion) support package for state governments but stopped short of providing another BRL 8.6 billion on Wednesday afternoon, vetoing legislation that would extinguish a Central Bank fund and hand...

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