BRASILIA, May 14 (Reuters) - Economists expect Brazil’s government to post a primary budget deficit this year of 571.4 billion reais ($96 billion), more than 100 billion reais wider than their forecast just a month ago, the Economy Ministry said on Thursday.
The wider deficit for the central government, comprising the Treasury, central bank and social security system, reflects the rapid increase in spending and fall in revenues resulting from the coronavirus pandemic.
The estimate in the ministry’s monthly ‘PRISMA’ fiscal report is slightly wider than the government’s most recent estimate of a 566.6 billion reais deficit excluding interest payments, equivalent to 7.79% of gross domestic product.
But Waldery Rodrigues, special secretary to the ministry, said on Wednesday that this will be revised on Friday. Officials said the deficit this year could reach 8% or more of GDP, a huge shift from the government’s original target of a 124 billion reais deficit at the start of the year.
The PRISMA report also showed that economists expect a 169.4 billion reais primary deficit next year, wider than their 139.5 billion reais forecast in April and the government’s goal of a 149.6 billion reais shortfall.
Economists now expect Brazil’s gross debt to reach 90% of GDP this year, up from last month’s estimate of 86.50%, and 88.6% of GDP next year, also up from April’s 85.2% forecast, according to the PRISMA report. (Reporting by Marcela Ayres in Brasilia Writing by Jamie McGeever; Editing by David Gregorio)