(MENAFN- AFP) Brazil is raising its deficit ceiling for this year and 2018 because of a big drop in tax revenue, sluggish growth and other woes in Latin America's biggest economy.
The government's limit for the fiscal deficit this year was the equivalent of $43.7 billion, and $40.6 billion in 2018. But now it will go up to $50 billion for both years, Finance Minister Henrique Meirelles said Tuesday.
The fiscal deficit is defined as the difference between what a government spends and its revenues, excluding money that comes from borrowing.
Meirelles said the numbers will change significantly, again for the worse, in 2019 and 2020 as well. In the latter case, what had been a small projected surplus of $2.6 billion is now expected to be a deficit of $20.4 billion.
These adjustments had been expected since Friday when President Michel Temer and his economic advisers met to discuss the change. But the debate lasted into this week.
Brazil emerged from its worst ever recession in the first quarter of 2017, but just barely.
Largely thanks to booming agro-industry results, the economy grew one percent for the quarter, ending eight consecutive quarters of shrinkage.
That offered a glimmer of hope for the South American economic giant.
In an effort to improve government balance sheets, last year Brazil launched a program to privatize management of several airports.
Last week, the transport ministry said it was assessing bids to run 19 of them.
Late last year, the government also implemented an austerity plan designed to lure back investors spooked by the country's economic turmoil. This included a freeze on government spending for 20 years.
Once the darling of the world's emerging of economies, Brazil tanked in 2015 as global prices for commodities fell. Its economy shrank a stunning 3.8 percent that year.
The figure was for 2016 was an almost equally dismal fall of 3.6 percent.
The government is hoping for modest expansion of at least 0.5 percent in 2017 and two percent next year.
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