Brazilian Government Faces $7 Billion Hole in 2021

The Brazilian government faces a $7 billion hole in its 2021 budget because of the emergency aid payments being held over to next year and welfare benefits indexed to a higher inflation rate than anticipated.

The Brazilian government faces a $7 billion hole in its 2021 budget because of the emergency aid payments being held over to next year and welfare benefits indexed to a higher inflation rate than anticipated.

According to an O Globo Friday morning report, a source on the government’s economy team revealed this situation, pointing out that the actual figure hasn’t been determined yet because this year’s emergency expenditures to tackle the COVID-19 crisis haven’t been fully tallied. The TV network said this will put additional pressure on an already critical fiscal situation.

The government of President Jair Bolsonaro will already chalk up a record budget deficit this year excluding interest payments of over $500 billion, worth 11.7 percent of gross domestic product.

The 2021 Annual Budget Law forecast discretionary spending of about $10 billion. Any reduction to that could pose a serious threat to some government departments and public services.


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