(Updates with comments from Treasury secretary Ceron)
BRASILIA, March 22 (Reuters) - Brazil's government
forecast on Wednesday that this year's primary deficit will be
significantly below the official target, helped by a jump in
expected tax revenue.
The Finance and Planning Ministries projected a primary
budget deficit of 107.6 billion reais ($20.6 billion) for the
central government this year, equal to 1.0% of GDP, according to
their first 2023 bi-monthly revenue and expenditure report.
The forecast is significantly below the target primary
deficit of 228.1 billion reais set by the annual budget law for
the central government, which includes Brazil's Treasury,
central bank, and Social Security.
It also meets the expectation highlighted by Finance
Minister Fernando Haddad to close the year with a deficit equal
to or below 1% of GDP, unveiled after he presented in January a
plan of spending cuts and revenue-raising measures, including
the resumption of fuel taxes that he convinced new leftist
President Luiz Inacio Lula da Silva to embrace.
Later on Wednesday, Treasury Secretary Rogerio Ceron
said at a news conference that a primary budget deficit below
100 billion reais in 2023 is possible, and that the government
will enter 2024 seeking for fiscal balance.
The improvement was driven by an increase of 110 billion
reais in estimated net revenues for this year, primarily due to
the expectation of higher tax collection.
Regarding expenses, the government reduced by 10.6 billion
reais the expenditures calculated in the budget law.
This year's public accounts are expected to reverse the
central government's primary surplus recorded in 2022, the first
in nine years, with the deficit deepened by a massive spending
package that Lula got Congress to approve.
The package breaches the constitutional spending cap to
increase social expenses and meet campaign promises.
The government has already committed to presenting a new
fiscal anchor to signal fiscal sustainability, but Lula has
postponed the announcement of the much-awaited rule to April.
($1 = 5.2186 reais)
(Reporting by Marcela Ayres; Editing by Leslie Adler, David
Gregorio and Diane Craft)
