Brazil’s government will end 2024 within tolerance range of fiscal target, finance minister says Reuters

BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad said on Friday the government should close this year within the tolerance range of its fiscal target if Congress approves compensation for the payroll tax exemption.

The government’s goal this year is to eliminate the primary deficit, which excludes interest payments, with a tolerance band of 0.25% of GDP, either up or down. This means the primary deficit could be close to 29 billion reais ($5.13 billion).

Central bank data released Friday showed the central government ran a primary deficit of 8.6 billion reais in July and a deficit of 269 billion reais over the past 12 months.

Haddad, speaking at an event in Sao Paulo, said the July figure was in line with the target for the year.

Members of the Government emphasized that the fiscal results in the second half of the year will be better than in the first, which saw the anticipation of significant expenses, including payments ordered by the court.

Haddad noted that if the government had approved 100 percent of what was proposed last year, it would be on track for a zero primary deficit this year, making it sustainable.

The minister appreciated that the labor market is overheated, and now is the time to adjust the social programs.

He also said that Latin America’s largest economy is expanding at a rate of 3 percent and, given its potential, should not settle for growth below the global average.

($1 = 5.6489 reais)