January 16, 2020 / 2:37 PM / 2 days ago

Brazil government debt, deficit projections continue to fall: report

BRASILIA (Reuters) - The Brazilian government’s fiscal outlook for this year and next continues to improve, an Economy Ministry summary of private sector forecasts on Thursday showed, which will give the government more leeway to meet its deficit targets.

Median forecasts suggest the primary budget deficit this year, before interest rate payments are taken into account, will be 82.3 billion reais ($19.7 billion), down from 84 bln reais predicted previously, according to the Ministry’s latest ‘Prisma’ report.

That would be significantly below the official target of 124.1 bln reais, but still mark the seventh consecutive annual deficit.

Economists’ primary deficit forecast for 2021 is 47.2 bln reais, slightly down from 47.6 bln reais in last month’s survey, and again well below the government’s official target of a 68.5 bln reais shortfall.

The report also showed that economists have reduced their forecast for Brazil’s gross national debt this year to 78% of gross domestic product from 79%. That is expected to remain steady into 2021.

Earlier this week Waldery Rodrigues, special secretary to the Economy Ministry, said Brazil’s gross debt will no longer exceed 80% of GDP, as record low official interest rates continue to reduce debt servicing costs.

Reporting by Marcela Ayres; Writing by Jamie McGeever; Editing by David Gregorio

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