Brazil’s Government to Conclude 2024 Within Fiscal Target Tolerance Band, Finance Minister States – Reuters

Brazil’s Finance Minister Fernando Haddad announced on Friday that the government is expected to meet its fiscal target for the year, provided that Congress approves compensation for payroll tax waivers.

The government’s aim is to eliminate the primary deficit, which does not account for interest payments, with a permissible margin of 0.25% of GDP, either above or below this target. This implies the primary deficit could approximate 29 billion reais (about $5.13 billion).

Recent data from the central bank revealed that the central government recorded a primary deficit of 8.6 billion reais in July, contributing to a total deficit of 269 billion reais over the past year. Haddad affirmed that the July deficit aligns with the objectives set for the year.

Government officials have indicated that fiscal performance in the latter half of the year is likely to improve compared to the first half, which saw early spending, including mandated payments, significantly increase.

Haddad noted that had the government enacted all proposed measures from last year, it would have been poised for a zero primary deficit this year, indicating fiscal sustainability.

He also commented on the current labor market, describing it as overheated, and stated that it is time to adjust social programs accordingly.

Furthermore, Haddad indicated that Brazil, as the largest economy in Latin America, is growing at a rate of 3% and suggested that it should aim for growth that meets or exceeds the global average, considering its potential.