LatinNews Daily - 23 July 2020

* Brazil’s economy ministry has predicted that the federal government’s primary deficit will reach R$787.4bn (US$153.8bn) in 2020, which would be its highest level since 1997. The figure was published in the government’s bimonthly report on income and spending, and represents a 45% increase on the primary deficit forecast published in May. The report attributes the rising public deficit to the approval of extraordinary loans and to reduced tax revenue during the coronavirus (Covid-19) pandemic, and says that most of the increased spending has been on health services and measures to limit unemployment. The government had initially set a primary deficit target of R$124.1bn in its 2020 budget, but a state of calamity approved by congress in March allows it to disregard this target, while separate legislation allows the government to bypass a constitutional spending cap for coronavirus-related expenses.

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