UPDATE 2-Brazil drops 2015 fiscal surplus goal, sees hefty shortfall
(Adds size of fiscal shortfall)
By Lisandra Paraguassu
BRASILIA Oct 22 (Reuters) - Brazil has given up on its goal of seeking a primary budget surplus this year and instead will record a massive shortfall as a deepening economic and political crisis drags on revenues, presidential chief of staff Jaques Wagner said on Thursday.
President Dilma Rousseff was forced to drop plans to reach a fiscal surplus and instead is projecting a deficit of at least 50 billion reais ($12.74 billion) as tax revenues have plummeted and the government is struggling with efforts to raise extra income, Wagner said.
That projected deficit could be even wider if the government decides to include up to 35 billion reais in arrears it owes state-run banks, two government officials told Reuters.
Wagner acknowledged that the projected deficit does not include those arrears.
In July, the government cut this year's primary surplus goal to 8.7 billion reais, or 0.15 percent of gross domestic product, from 66.3 billion reais, the equivalent of 1.1 percent of GDP, in its original budget.
The new fiscal goal has to be approved by Congress.
The outlook for a record deficit highlights just how difficult it will be for Rousseff to shore up government accounts and regain the confidence of investors backing away from the slumping economy. Continuación...