Brazil’s government sees 2024 fiscal target as feasible despite March deficit

Brazil’s government believes it will achieve this year’s fiscal target considering its tolerance margins, despite an unexpected budget deficit in March, where increased expenses overshadowed the rise in revenues.

The country’s primary deficit amounted to 1.5 billion reais ($293.8 million) last month, Treasury data showed on Monday, contrary to the 1.5 billion surplus forecast by economists polled by Reuters.

Still, Treasury Secretary Rogerio Ceron said the difference compared to market expectations was small and that first-quarter results continue to indicate a “reasonable chance” that the primary surplus target range will be met this year.

The government aims to eliminate the primary deficit in 2024, with a margin of 0.25 percentage point of gross domestic product (GDP) either up or down. The 12-month result reflects a deficit equivalent to 2.2% of GDP.

“Revenue is performing well, but there’s no room for relaxation, we need to stay firm,” Ceron told reporters, adding that the government may announce additional measures to offset any revenue setbacks if necessary.

Net revenue in March rose 8.3% in real terms from the previous year, reaching 163.9 billion reais, buoyed by a record tax collection for the period.

Total expenditure saw a smaller increase of 4.3%, albeit from a larger base, hitting 165.4 billion reais.

In the first quarter, the primary surplus stood at 19.4 billion reais, marking a 39.8% drop compared with the same period last year.

Source: Reuters

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