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Brazilian government meeting budget deficit, says minister

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Staff Writer | February 1, 2017
Henrique Meirelles
Economy in Brazil   $49.40 billion in 2016

Brazil's central government registered a primary budget deficit of $49.40 billion in 2016, meeting its target but recording a third consecutive annual deficit that reflects the dire state of the country's finances.

In December, the country posted a primary deficit of 60.124 billion reais ($19.25 billion).

The central government, which includes federal ministries, social security and the central bank - had been expected to post a deficit of 71.9 billion reais. In November, the central government recorded a deficit of 38.35 billion reais.

Finance Minister Henrique Meirelles said that the 2016 result was better than expected and that the country should resume generating budget surpluses again after approving a spending ceiling last year.

The bank's chief Ilan Goldfajn also commented there is room for additional cuts to Brazil's benchmark interest rate, bringing them towards a neutral level.

Brazil's central bank surprised markets with a larger-than-expected 75-basis-points cut to its benchmark Selic rate to 13.00% on Jan. 11, as the worst recession in Brazilian history threatens to stretch into a third year.


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