By Jamie McGeever and Marcela Ayres
BRASILIA, April 15 (Reuters) – Brazil’s government is on course to hit at least its tenth year of budget deficits, according to official targets published on Wednesday by the Economy Ministry, which is seeking more leeway to shift the goal posts, depending on the ebb and flow of tax revenues.
The ministry’s official budget proposals, which will now be submitted to Congress, show a projected budget deficit next year before interest payments of 149.6 billion reais ($28.5 billion), or 1.84% of gross domestic product.
That is more than double earlier indications before the new coronavirus pandemic tipped the economy into turmoil, but sharply down from the 600 billion reais or 8% of GDP for this year that Treasury Secretary Mansueto Almeida said on Tuesday is now likely.
The official primary deficit goals for 2022 are 127.5 billion reais, or 1.47% of GDP, and for 2023 they stand at 83.3 billion reais, or 0.9% of GDP, according to the proposals.
The last time Brazil’s central government posted a primary budget surplus was in 2013, just before the country fell into one of its deepest recessions on record.
The downturn about to hit this year from the coronavirus-triggered sudden halt to activity is widely expected to be the most severe in decades, with the International Monetary Fund and World Bank both predicting a contraction of more than 5% for Brazil.
The government is sticking with its zero percent forecast for this year but that is so the Economy Ministry can officially change it in its next bi-monthly revenue and expenditure report in May. Adolfo Sachsida, economic policy secretary, said on Wednesday the economy will certainly contract this year.
Waldery Rodrigues, special secretary to the ministry, said that the government is proposing that it be able to adjust the deficit goals in certain reports throughout the year depending on how the revenue side of the public finances is looking.
Uncertainty surrounding the economy is so great right now that it is virtually impossible to confidently and accurately predict tax revenues so far out, Rodrigues said.
Treasury Secretary Mansueto Almeida said the government must make a huge effort over the next two years to boost revenue, citing a resumption of the government’s concessions and privatization programs which will help to reduce debt.
The official goals on Wednesday also showed the government expects GDP growth of 3.3% next year, 2.4% in 2022 and 2.5% in 2023. It forecasts gross national debt at 84.3% of GDP next year, 85.5% of GDP in 2022 and 86.4% in 2023.
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