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Brazil Cuts Spending Curb Amid Revenue Shortfall
25 Jul
Summary
- Brazil reduced its required spending curb by 5.7 billion reais.
- Lower mandatory expenditures offset a shortfall in dividend tax revenue.
- The primary budget deficit projection improved to 52 billion reais.
The Brazilian government has announced a reduction in its mandated spending curb by 5.7 billion reais, now set at 17.9 billion reais. This adjustment reflects a decrease in anticipated mandatory expenditures, such as personnel and pensions.
Despite projections indicating a shortfall in dividend tax revenue, falling from an estimated 28 billion reais to 17.2 billion reais, the government has decided not to incorporate this immediately into official reports. Officials expressed confidence in meeting the overall fiscal target range.
The nation's primary budget deficit forecast has also been revised downwards, now projected at 52 billion reais for the year. This improvement, combined with exclusions allowed under budget rules, leads to an expected primary surplus of 10.8 billion reais, aligning with the fiscal goal.
