On Friday, Brazil’s Economy Ministry had issued a statement saying that the economists were expecting the Latin American’s largest economy to report a preliminary budget deficit of $140 billion or 709 billion Brazilian Reais, about 24 per cent higher than a projected shortfall of $113 billion announced less than a month earlier.
In point of fact, the rapid widening of a record deficit in Brazilian Government’s 2020-21 fiscal year budget comprising the Central Bank, Treasury and Social Security System, had underscored the scale of expenses alongside a rancorous outlook on revenues driven by the pandemic outbreak in Bolsonaro’s Brazil, the Brazilian President who had already faced off a flurry of criticisms because of undermining the extent of threats the pandemic outbreak could possess.
Brazil’s fiscal 2020-21 budget deficit nears 10% of nation’s entire GDP
Aside from that, while the monthly “PRIMSA” fiscal report from the Brazilian economy ministry had revealed a much wider deficit in budget, which for the moment being was expected to be 9.4 per cent of the nation’s entire GDP (Gross Domestic Product), top officials were quoted saying over the recent past that the deficit would likely to balloon further in light of a looming recession alongside an inevitable hit to the nation’s revenues generated from the taxations amid a pandemic outbreak at large, meaning the budget deficit would be significantly greater that the Government’s original target of $24 billion.
On top of that, the PRIMSA monthly survey report had also shown that the economists were now expecting a budget deficit of $40 billion next year, substantially higher than a Government forecast of $30 billion. In tandem, as a consequential repercussion of the sky-high budget deficit, the nation’s gross debt was expected to hit an all-time high of 92.7 per cent of the country entire Gross Domestic Product, up from a May survey forecast of 88.6 per cent.