Brazil sees record 2015 primary deficit as revenues drop

Brazil’s government is considering slashing its key fiscal goal to a deficit of around 50 billion reais ($12.9 billion) this year as revenues plummet due to the ongoing recession, three sources with direct knowledge of the talks said on Tuesday.

That primary budget deficit would be equal to 0.85 percent of the country’s gross domestic product, the largest on record. It would wipe out the previous goal for a surplus of 0.15 percent of GDP. Brazil’s primary surplus, or savings prior to debt payments, has turned into a small deficit in recent years while the overall budget shortfall has ballooned above 8 percent of GDP.

“The drop in revenues was sharper than expected,” a lawmaker involved in the negotiations told Reuters on condition of anonymity. “That number is not final yet, hopefully we will have it ready for tomorrow.”

Internal government discussions have been ongoing between members of President Dilma Rousseff’s economic team in an effort to reach consensus on the matter, the sources said.

The change in the primary budget target has to be approved by Congress. The new target was expected to be voted this week in a bicameral budget commission.

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