Brazil’s government projected a lower primary budget deficit this year, official figures showed on Friday, with a booming tax collection helping to improve the short-term fiscal balance.
The Economy Ministry forecast a 59.354 billion reais ($10.80 billion) primary budget deficit for the central government this year, from the 65.5 billion reais deficit seen in May and against an official deficit target of 170.5 billion reais.
The outlook for net revenues jumped by 51.955 billion reais, while the increase in expenses reached 45.819 billion reais, said the ministry in its latest bi-monthly revenue and expenditure report.
Tax revenues soared to a record high in June, repeating a feat achieved every other month this year, among increases in corporate income taxes and oil royalties.
The government also announced the need to freeze 6.739 billion reais in expenditures to comply with the spending cap rule, which limits spending growth to the previous year’s inflation.
According to the Economy Ministry, the block will be necessary to compensate for extra expenditures after Congress overturning President Jair Bolsonaro’s vetoes to bills linked to the cultural sector and a wage floor for community health workers.