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Government Raises 2023 Deficit Estimate, BCB Directors Speak

BRAZIL
  • The government raised its estimate for this year’s budget gap to account for rising government spending and declining revenue amid a weakening economy. The primary fiscal deficit, which doesn’t take into account interest payments, will reach 177.4 billion reais ($36.1 billion) this year, compared with a previous forecast of 141.4 billion reais. Markets had an immediate negative reaction to the news, although momentum quickly evaporated, and markets returned to pre-headline levels.
  • Analysts have noted the Senate’s Economic Affairs Committee approved the proposal altering the taxation of offshore and exclusive funds. This was approved by the Lower House and is an important part of the government’s revenue-raising plan, counted on by the administration to comply with its zero-deficit target for 2024. The bill moves to the senate floor and could be voted on tonight.
  • Central bank representatives speak during the day. President Roberto Campos Neto travels to Sao Paulo to attend a public event hosted by Endeavor Brasil at 6pm and Monetary Policy Director Gabriel Galipolo will attend an event hosted by Aberj at 10am.

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