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LatinNews Daily - 01 February 2021

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In brief: Brazil’s fiscal deficit reaches new record

* Brazil’s public sector has closed 2020 with a record primary deficit of R$703bn (US$128.7bn), the highest figure since current records began in 2001. This is equivalent to 9.49% of GDP and compares with a fiscal deficit of R$61.9bn in 2019, according to the latest fiscal results released by the central bank (BCB). The central government saw a R$745.3bn deficit last year, while state governments recorded a R$38.7bn surplus, and state-owned companies a R$3.6bn surplus. According to the head of the BCB’s statistics department, Fernando Rocha, federal spending to fight the coronavirus (Covid-19) pandemic accounted for around R$524bn of the year-on-year difference, with the effects of the economic recession also contributing to the deepening fiscal deficit.