BRAZIL (Reuters) – The Brazilian government on Wednesday revised its estimate of the 2020 primary budget deficit to 787.4 billion reais ($ 154 billion) in bi-monthly income and expenditure reports, from a deficit of 540.5 billion reais projected in the latest report in May .
The widening deficit is almost entirely the result of announced emergency expenditure measures to reduce the shock associated with the corona virus on the economy, with the outlook for income virtually unchanged from two months ago.
The Ministry of Economy maintained that the central government ‘s main income estimate was largely stable at 1.2 trillion reais from the latest 1.1 trillion reais, and raised its main spending estimate by 229.3 billion reais to 1.98 trillion reais.
The calculation is based on gross domestic product which shrank by 4.7% this year, projections maintained by the ministry earlier this month and which remain at the optimistic end of the forecast spectrum.
Earlier on Wednesday, Finance Minister Bruno Funchal said the main deficit excluding interest payments would probably reach around 12% of GDP this year, easily the widest deficit ever recorded.
The latest deficit estimates may be significantly broader than the last income and expenditure report in May, but not far from more recent estimates because the crisis has increased in the last two months.
Earlier this month, the Ministry of Economy said it projected the central government’s main deficit of 795.6 billion reais, or 11.5% of gross domestic product, and a wider public sector deficit of 828.6 billion reais.
Reporting by Jamie McGeever, Editing by Franklin Paul and Bernadette Baum
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