Investors, however, still fear long-term pressure on public debt after President Luiz Inacio Lula da Silva secured Congress approval for a multi-billion-real spending package that bypasses the constitutional cap to meet campaign pledges. The government has yet to present a new fiscal framework, promised for April. Even so, analysts polled by the government also improved their forecasts for Brazil's gross debt in both 2023 and 2024, saying the key metric would reach 78.3% of Gross Domestic Product (GDP) this year and 80.71% the next. Their previous estimates were of 79.1% for 2023 and 82.4% for 2024. ($1 = 5.1504 reais) (Reporting by Luana Maria Benedito; Writing by Gabriel Araujo; Editing by Sandra Maler)
SAO PAULO, Feb 14 (Reuters) - Brazilian analysts have
improved their expectations for the government's primary balance
in 2023 but still forecast a large deficit amid market concerns
about a surge in spending by the new leftist administration.
The improved result would come on the back of higher tax
revenue, a poll released by the Finance Ministry on Tuesday
showed, with the balance further recovering in 2024 also due to
higher revenue.
Analysts now see a primary deficit of 109.64 billion reais
($21.29 billion) this year, the median estimate in the poll
showed, a better result than the previous January forecast of a
125.99 billion-real deficit.
For next year, they foresee a deficit of 96.15 billion
reais, the "Prisma Fiscal" poll added, from a previous estimate
of 118.58 billion reais.
The fresh projections come as Finance Minister Fernando
Haddad earlier this year unveiled a set of measures aimed at
reducing the 232 billion reais primary deficit forecast in this
year's budget.
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