CORRECTED-MNI: Changing Brazil Fiscal Target Not "Plan A"
Officials are concerned by Congressional spending plans, a senior source says.
(Corrects deficit target in fourth paragraph)
The Brazilian government still hopes it will be able to keep to its current fiscal targets for 2024 and 2025, a senior member of the government’s economic team told MNI on Wednesday, though he added that officials were concerned by the reluctance of Congress to trim expensive legislation.
Planning and Budget Minister Simone Tebet said on Tuesday that the government could reconsider its targets, and that officials were due to receive revenue projections for 2025 on Wednesday. (See MNI BRIEF: Brazil Faces Fiscal Challenge In 2025 - Campos Neto)
But revising the fiscal target is not the government’s Plan A, the government source told MNI. A close examination of this year’s revenues will “establish a basis” for not only this year’s target but also those of subsequent years, the source said.
However the government's aim of achieving a primary deficit of zero this year and a surplus of 0.5% of gross domestic product in 2025 will require additional actions on both the revenue and expenditure fronts, the source emphasized. Measures in Congress such as a payroll relief bill, which would add to fiscal expenses, are also a risk, the source said.