(Adds details on revenues, background)
BRASILIA, July 22 The Brazilian government on
Tuesday reduced its economic growth forecast for this year to
1.8 percent from 2.5 percent, a prediction that remains well
above market economists' estimates.
The government raised its inflation forecast to 6.2 percent
in 2014 from a previous estimate of 5.6 percent, according to a
fiscal report released by the planning ministry.
The Brazilian economy should grow just 0.97 percent this
year, according to a central bank weekly survey of economists.
Extraordinary tax revenues should reach about 27 billion
reais ($12.22 billion) from July to December, according to the
report. The government will also receive an extra 2 billion
reais from state-run oil company Petrobras for the production
rights of some subsalt areas.
One-time income items have represented about a quarter of
all the revenue the government collected so far this year,
according to government data.
The government estimates for tax revenues in 2014 dropped
to 780 billion reais from 784 billion reais previously.
The government kept unchanged its primary surplus goal of 99
billion reais or the equivalent of 1.9 percent of GDP for 2014.
However, many economists say a severe slowdown in tax
revenue growth and high public spending could jeopardize the
primary surplus goal this year.
The country ran a primary deficit of 11.046 billion reais in
May, the widest gap on record after the 20.951 billion reais
deficit posted in December 2008.
Closely watched by financial markets, the primary budget
balance is a key gauge of the country's creditworthiness. It
measures how much government revenue can be earmarked to meet
interest payments on debt.
Failure by President Dilma Rousseff to meet Brazil's primary
budget goal could not only keep pressure on already-high
inflation, but also hurt business confidence, which is
considered one of the main reasons for Brazil's subpar economic
growth over the past three years.
($1 = 2.2107 Brazilian Reais)
(Reporting by Luciana Otoni; Writing by Silvio Cascione and
Alonso Soto; Editing by James Dalgleish and Meredith Mazzilli)